TechFlow news, October 19 — According to the UK's Financial Times, the UK tax authority, Her Majesty's Revenue and Customs (HMRC), has sent warning letters to approximately 65,000 individuals suspected of failing to correctly report capital gains tax related to crypto assets. This marks nearly double the roughly 27,700 letters sent the previous year. Cumulatively, over 100,000 such letters have been issued over recent years, indicating significantly strengthened regulatory enforcement.
HMRC stated that these letters aim to prompt taxpayers to "self-correct" their crypto asset reporting rather than immediately initiating formal investigations.
It is estimated that around 7 million adults in the UK hold crypto assets, with the market size growing rapidly. In the UK, exchanging one cryptocurrency for another, spending cryptocurrency, gifting it to someone other than a spouse/partner, among other activities, may trigger capital gains tax obligations, while staking rewards and airdrops are typically treated as income.
