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On October 30, UK Chancellor Rachel Reeves announced a capital gains tax (CGT) rate increase for high-income individuals, raising it to 24%. This change has raised concerns in the cryptocurrency community, where some investors fear that increased tax and regulatory pressures will diminish the UK's appeal for digital asset investment.
The CGT increase comes amidst an awareness gap among crypto holders regarding tax obligations. A 2022 report from HM Revenue and Customs (HMRC) found that only 34% of cryptocurrency owners had a good understanding of CGT, leaving many uncertain or unaware of their responsibilities. Ahead of the January 31 self-assessment deadline, HMRC intends to boost outreach efforts to ensure compliance among crypto investors.
The tax hike has sparked anxiety among crypto advocates. “It will never go down. Once they raise it, and people don’t set the world on fire, calm settles, and people forget,” said Oculus, a UK-based crypto consultant on X. “After a while, that is just what CGT is in the UK. So it only stays or gets worse from here. ”
