UK Enforces Crypto Tax Break For Foreigners Who Appoints Local Brokers To Invest

Key Points:

• From January 1, 2023, overseas investors who choose to work with local brokers or investment managers to make cryptocurrency investments will be excluded from paying taxes in the UK.
• According to HMRC, the tax exemption was a key element in luring international investors, as it ensured that foreign investors wouldn’t be subject to UK tax simply by hiring a UK investment manager.
• The exception has been expanded to cover crypto assets in an effort to maintain the position as a global leader in investment management. This will prevent the appointment of UK managers for crypto-related funds from being delayed.

From January 1, 2023, the United Kingdom will implement a tax exemption policy for foreign investors who appoint local brokers or investment managers to invest in cryptocurrencies.

The nation already provides resident cryptocurrency dealers with tax advice. HM Revenue and Customs (HMRC) released a consultation in July to solicit opinions from experts and investors on how it should tax decentralized finance.

HMRC said the exemption was an important factor in attracting global investors, meaning foreign investors would not be brought under tax simply by appointing a UK investment manager.

In an effort to cement the status as an investment management hub, the exemption has been extended to include crypto assets so that crypto-asset-related funds do not delay the appointment of UK managers.

Rishi Sunak, now prime minister, stated in April that he wished to make the UK a worldwide crypto hub. The tax exemption, which was announced in December, is a component of Sunak’s plans to make the U.K. a hub for the cryptocurrency industry.

Earlier this month, the UK said it would broaden tax benefits for investment managers to include crypto assets. Jeremy Hunt, the Chancellor of the Exchequer, unveiled a package of 30 regulatory changes for the UK banking sector. The introduction of a digital pound, blockchain testing, and increased investment in cryptocurrency companies all made the list.

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