UK Prime Minister Rishi Sunak Cancels Tax Payments for Foreign Crypto Buyers: Details
Rishi Sunak, the Prime Minister of the United Kingdom, is actively working to shape the crypto industry for the country with rules and regulations. From 2023, foreigners who use local UK crypto exchanges to buy cryptocurrencies will be exempt from paying taxes. In the UK, profits generated from crypto activities can be taxed from 20% to 45% depending on the tax bracket in which the income generated falls. The rule went into effect on January 1, 2023.
The tax relief will apply to a non-UK resident using a local exchange to conduct crypto transactions. An investment manager trading on behalf of a non-UK resident will also benefit from tax relief on profits generated from crypto trading, an official article on the new rule noted.
Former UK Finance Minister Sunak aims to make the country a hub for the cryptocurrency and Web3 industries.
“This exemption is an important factor in attracting global investors, which means overseas investors will not be subject to UK tax simply by appointing UK-based investment managers,” said a report from Coindesk. citing the UK Revenue Service.
“To strengthen the UK’s position as an investment management centre, this exemption has been extended to include crypto assets, so that funds that include them are not deterred from appointing a UK manager.”
Sunak had first announced the rule in December last year and had scheduled January 1, 2023 as the day of application.
The UK government, which legalized stablecoins last year, is exploring ways to give local financial regulators more authority over the crypto industry.
In June 2022, the UK released a consultation paper outlining laws to mitigate the risks associated with failing stablecoin projects. At the time, authorities in the United Kingdom decided to grant more control to the Bank of England (BoE) to deal with failing stablecoin issuers.
Treasury officials in the UK have reportedly worked with crypto companies and groups to formulate laws that improve their performance and, in turn, bring revenue to the country.
In July last year, the UK Legal Affairs Committee proposed changes to existing property laws to include cryptocurrencies and other virtual digital assets.
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