The UK government has introduced a tax relief policy for foreign investors who use local brokers or investment managers to invest in cryptocurrencies. The policy, which came into effect on January 1, 2023, aims to attract global investors to the UK and cement the country’s status as an investment management center.
According to HM Revenue and Customs, foreign investors will no longer be subject to UK tax simply because they appoint a UK investment manager to handle their cryptocurrency investments. This exemption has been extended to include crypto-assets, ensuring that funds related to crypto-assets do not deter the appointment of UK managers.
The move has been welcomed by the cryptocurrency industry, with many hailing it as a positive step towards the mainstream adoption of digital currencies. It is also seen as a sign that the UK government is taking the issue of cryptocurrency taxation seriously and is looking for ways to support the industry.
The tax relief policy is part of a wider effort by the UK government to create a favorable environment for cryptocurrency and fintech companies. In recent years, the country has taken a number of steps to encourage the growth of these sectors, including the establishment of the Fintech Delivery Panel and the creation of the Cryptoasset Taskforce.
The taskforce, which was set up in 2018, is responsible for developing a framework for the regulation of cryptocurrency and blockchain-based assets. It is made up of representatives from the Treasury, the Bank of England, and the Financial Conduct Authority (FCA).
One of the key areas that the taskforce has focused on is the development of a regulatory framework for initial coin offerings (ICOs). In 2019, the FCA published guidance on ICOs, outlining the risks and regulatory requirements that companies need to consider when raising funds through this means.
The tax relief policy for foreign investors is seen as the latest in a series of moves by the UK government to position itself as a leader in the cryptocurrency and fintech sectors. It is hoped that the policy will help to attract more international investment to the country and further strengthen the UK’s reputation as a hub for innovation and technological advancement.
