CryptoUK Policy Advisor: UK raising capital gains tax to above 28% will affect cryptocurrency holders

UK Chancellor of the Exchequer Rachel Reeves announced her party's first UK budget in over a decade on Wednesday. According to Suzanne Morsfield, a policy advisor at trade association CryptoUK, Reeves' prospect of raising capital gains tax to over 28% would have a particularly severe impact on around 5 million cryptocurrency holders in the UK.

Capital gains tax refers to the profits gained from investments in assets such as stocks or real estate, which affects only a tiny percentage of people in the UK. However, Morsfield said that almost all cryptocurrency investors would be affected as the main way of taxing crypto assets is under the capital gains regime. Morsfield pointed out that data from the UK Financial Conduct Authority showed that 63% of the 5 million cryptocurrency owners in the UK hold cryptocurrencies worth £500 or less, with an average holding of £1,600.