In a significant move, HM Revenue and Customs (HMRC) has increased its efforts to ensure cryptocurrency investors are paying the correct taxes on their profits. This week, HMRC began sending out “nudge letters” to individuals suspected of not reporting or underreporting their crypto gains. More letters are expected to be sent out next month.

Anyone who has profited from the sale of cryptoassets could have tax obligations and may need to file a tax return. Failing to do so could result in interest charges and penalties on any overdue taxes. According to HMRC, the rate of non-compliance in reporting cryptoasset holdings is estimated to be between 55% and 95%.

Tax Implications for Crypto Investors

Profits from cryptocurrency transactions—such as trading Bitcoin, Ethereum, and other digital assets—may be subject to various forms of taxation, including capital gains tax, income tax, and National Insurance contributions. The specific tax obligations depend on how the profits were earned.

Investors who have traded or sold cryptoassets for fiat currency could be liable for capital gains tax at a rate of 20%. If their total capital gains in a single tax year exceed the annual tax-free allowance, they must pay tax on the amount above this threshold. For the current tax year, the capital gains tax threshold is set at £3,000, down from £6,000 in the previous year.

In certain situations, income tax and National Insurance may also apply, particularly if the investor’s cryptoassets have generated income. For example, cryptocurrencies that allow “staking”—where assets are locked for a period in exchange for interest—are treated as income by HMRC and taxed accordingly.

Ignoring HMRC Letters Could Have Serious Consequences

Ignoring these nudge letters could lead to significant penalties.  Many cryptocurrency owners might not be fully aware of their tax obligations, especially if they have never filed a tax return before.

Those receiving a letter should not ignore it and you may need to gather reports from financial advisers or online platforms to update your tax status. Failure to do so could result in late payment interest and penalties, which can be as high as 100% of the tax owed or even more if the assets were held offshore.

Crypto Firms Must Share Data with HMRC

Under the upcoming Crypto Asset Reporting Framework (CARF), developed by the Organisation for Economic Co-operation and Development (OECD), the process of HMRC obtaining data from cryptocurrency platforms will become automatic. This new framework, expected to be fully implemented in the UK by 2027, will require crypto service providers to collect and report detailed transaction information to tax authorities, thereby increasing transparency and helping to curb tax evasion.

HMRC anticipates that these measures will make it easier to identify and address instances of non-compliance among cryptocurrency investors.

The post HMRC Targets Cryptocurrency Investors with New Tax Enforcement Efforts appeared first on TS Tax.

At TS Partners, we believe that understanding you and your loved ones is just as important as understanding your financial situation. That’s why our inheritance tax (IHT) and estate planning advice is tailored specifically to your unique circumstances.

Our experts are dedicated to helping you leave a meaningful legacy.

Understanding Inheritance Tax (IHT)

Inheritance Tax is a levy on your estate if its value exceeds £325,000, known as the nil rate band. The current IHT rate is 40%, typically applied to the portion of your estate passed on to beneficiaries other than your spouse or civil partner. Tax rates may vary based on individual situations and are subject to change.

What is Estate Planning?

Estate planning is the process of organising the transfer of your assets, both during your life and after your death, in alignment with your wishes and in the most tax-efficient way possible.

A significant part of estate planning involves managing your IHT liability. Early and effective planning can significantly reduce the financial impact of IHT on your estate.

How We Can Support You

Our estate planning advisers at TS Partners are here to help ensure that you have the financial resources you need for a comfortable life, while also preparing for the unexpected. We aim to empower you to make informed financial decisions with confidence.

Our team can assist you and your family with:

• Managing inheritance tax liabilities
• Maximising available tax allowances
• Estimating your potential IHT bill and estate value
• Determining how much you can afford to spend or give away
• Passing on your wealth to loved ones
• Making charitable contributions
• Setting up and managing trusts

Let us guide you through the complexities of estate planning, so you can focus on what matters most—your family and your future.

The post Inheritance tax and estate planning advice and solutions appeared first on TS Tax.

If your property is owned or leased by a limited company, you (whether landlord or tenant) may be able to get tax relief on the costs of removing the asbestos and the replacement roof.

This is called land remediation tax relief, and it’s a government incentive to encourage companies to invest in the removal of asbestos.

With the current Corporation Tax rate of 25%, the tax cut can result in up to a 37.5% tax saving of the amount spent, e.g. a £100,000 spend could save £37,500.

Does my project fulfil the requirements for this tax relief?

The following conditions must be met to qualify for this government approved Tax Relief:

• The land/building must be in the UK.
• The company must purchase the property (or a minimum 7-year lease of it) for its commerce or real estate rental business.
• At the time of acquisition, the asbestos was present.
• The price of the property wasn’t reduced directly to allow the buyer to carry out the asbestos removal works.

What are the benefits of land remediation relief?

How much you can claim depends on the type of expenditure. Below are examples of how much your claim is worth depending on the spend.

Capital Spend

This is where the cost is capitalised and hasn’t gone through the profit and loss account. Companies can receive up to 150% relief under capital spend, resulting in a 37.5% tax savings gain (37.5p for every £1 spent).

Revenue Spend

This is where the cost has been put through the profit and loss account, and therefore already benefited from a reduction in corporation tax. These companies can receive up to an extra 50% relief, resulting in an additional tax savings gain of 12.5% (12.5p for every £1 spent).

This relief is also eligible for any projects that have been completed within the last 2 years.

Loss-making companies can claim a tax credit (cash in hand) of up to 24%.

Case Study

A TS Partners client wanted to cover a sheet roof with solar panels to reduce energy consumption, become more sustainable and reduce expenses. However, the roof sheets were made of asbestos, meaning the company couldn’t install solar panels directly onto the roof.

The company considered overlaying the asbestos with steel, but in the end, opted for removing the asbestos and replacing it with a new corrugated steel roof as the asbestos was nearing the end of its shelf life of 70 years.

Removing the asbestos qualifies for this tax relief, so on top of reducing energy costs and becoming more sustainable, our client made the following tax savings.

Download our information sheet: Asbestos_Removal_Tax_Relief_Info_Sheet

The post Did you know you can get tax relief for removing or cladding asbestos? appeared first on TS Tax.