Legal regulations of cryptocurrency in United Kingdom
The legal regulation of stock exchange financial instruments in the UK is one of the most impeccable.
As well as in Germany, the UK regulators reacted instantly to modern Blockchain technologies.
After the country’s economy fell under the influence of the crypto currency, in 2015 the UK has made all efforts to strengthen the national currency and more seriously began to monitor operations with cryptocurrencies.
Following China, the United Arab Emirates and other countries, the Central Bank of England put forward a proposal to develop its own national crypto currency. In the meantime, in December 2017, the UK Ministry of Finance has already prepared an instruction to the Center of Governmental Communications of the country to study this issue. Therefore, all answers to questions related to risks for the country from the crypto currency will be available during 2018.
The British Treasury has taken measures to limit the spread of Bitcoin in the Kingdom, for the same reasons as in many other countries, this is related with money laundering and receiving them dishonestly.
Therefore, in order to register crypto-exchange in the UK and obtain the appropriate license for crypto currency, it will be necessary to follow certain rules that will make cryptoexchanges perform verification and reveal the identity of the participant, as well as report on suspicious transactions.
Taxation of сryptocurrency in England
Up to 2014, the United Kingdom defined the crypto currency very specifically, it was under the definition of single-purpose vouchers, which in turn fell under the VAT.
Cryptocurrency, in particular Bitcoin, received the status of “foreign currency”. This entailed the regulation of all transactions with the crypto currency by the tax authorities. However, the tax status of transactions has not been fully determined, therefore speculation in the crypto currency market, exchange for pound sterling or mining, is not subject to taxation. And those cryptoexchanges/companies that provide services or goods for crypto currency, must pay VAT.
Thus, at the time of the transaction with the crypto currency, the price for the service or the goods that are subject to VAT should correspond to the value of the crypto currency in the national currency.
Regulators reserve the right to review each situation separately, and the resulting income may be subject to such taxes as:
- Capital gains tax
Registration of cryptoexchanges
A common global financial center, which includes New York, London, Hong Kong and other countries, and which operates according to the international market mechanism, is a kind of basis for registering crypto-instruments in accordance with English documents. This is due to the fact that it is England that has the largest financial institutions.
To summarize, in those countries that pay more attention to innovative technologies, in the next year or two it will be possible to observe a single regulatory framework in which the issue of ICO projects in which critical currencies participate will be resolved.
Registering a stock exchange or crypto currencyexchanger is not an easy task.
However, with the help of a team of SBSB professionals, you will easily achieve this goal. We offer the following services for the creation of exchanges that work with crypto currency: the choice of jurisdiction, assistance in registering a cryptoexchange or exchanger accepting a crypto currency, obtaining a license for crypto-currency activities, maintenance at all subsequent stages.
For over five years we have been advising our clients in the field of corporate law, international tax planning, finance, international licensing and integrated business support in more than 40 countries.
We will be glad to help you.