British Government Looking to Modify Tax Laws for Crypto

An open consultation period runs until June 22.

The British government is currently reviewing its tax rules around activities like borrowing, lending, and staking in crypto, and inviting members of the public to comment during the next eight weeks.

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Until June 22, this consultation period will allow citizens and the industry at large to weigh in on how the U.K. government is currently classifying tax laws around these activities.

Under Britain’s current tax code, borrowing and lending crypto is categorized as "miscellaneous income" and incurs income tax and potentially also capital gains tax if the owner sells the crypto from borrowing and lending.

“The need to determine and record the market value of assets at each step in the transaction may also give rise to a disproportionate administrative burden,” HM Revenue & Customs acknowledged.

Now the government is considering only requiring citizens to pay income tax or capital gains on crypto outside staking or lending, instead focusing on when digital assets are sold or exchanged for fiat or crypto.