Posting this as it might be of interest to anyone from the UK who buys and sells cryptos.
I’d been wondering how to vote on Thursday and as a UK user of cryptocurrencies the capital gains tax policies of each party were of interest to me.
I checked out the manifestos of the Conservatives, Labour and Lib Dems.
Labour are planning a massive increase in public spending funded by large tax increases. One big tax change is that they plan for Capital Gains Tax to be brought into line with Income Tax. CGT for sellers of cryptocurrency is currently a maximum of 20% of your gains. Labour plan to move the maximum up to 50% of your gains.
Similarly, the Lib Dems plan to remove the CGT tax free allowance and tax CGT at the same rates as Income Tax, so again, a large increase in CGT.
I couldn’t find any specific CGT proposals in the Conservative’s manifesto, but their proposals for public spending are far more modest than those of Labour, and so they would need to raise less through taxation. Ideologically the Conservatives have always been a party that seems to believe the best way forward is not to raise public spending and fund that with massive tax rises but instead to try to create the conditions that encourage the economy to grow (e.g. lowering the tax burden on businesses and individuals) and generate more wealth for everyone that way. Whether you agree with that approach or not is a matter of ideology and political preference, but it seems the Conservatives are the only major party that haven’t proposed a major increase in CGT.
Labour’s plan of big tax increases for the highest earners in order to fund more public spending seems fair at first glance, but the problem for me is that their proposed CGT changes will hit not just the very wealthy but also those on very low incomes – if they happen to have receive a one-off major windfall that’s subject to CGT – and this is exactly where crypto gains come in.
Anyone who might be on a very low income, but has bought…