U.K. Government Exempts Foreign Investors from Cryptocurrency Taxes to Attract Investment

The U.K. government has announced that it will exempt foreign investors from paying taxes on cryptocurrency purchases made through local investment managers or brokers starting Sunday. This tax break is part of Prime Minister Rishi Sunak’s plan to establish the U.K. as a cryptocurrency hub. The HM Revenue and Customs, the government’s tax agency, stated in an email to CoinDesk that the exemption will be important in attracting global investors and will ensure that foreign investors are not subject to U.K. taxes simply by working with U.K.-based investment managers. The exemption has been extended to include cryptocurrency assets in order to encourage funds that include them to appoint U.K. managers.

U.K. Increases Efforts to Become Cryptocurrency Investment Hub

The U.K. already has a tax guide in place for resident cryptocurrency traders, and in July, the HM Revenue and Customs conducted a consultation to gather input from investors and professionals on how it should tax decentralized finance (DeFi). The Financial Services and Markets Bill, currently being debated by Parliament, would give local financial regulators more authority over cryptocurrency if it is passed into law. The U.K. Treasury also plans to begin a consultation in the coming weeks on how to regulate the cryptocurrency sector.