Reform UK has made a bold pledge to reshape the landscape of cryptocurrency taxation in the UK, promising to reduce capital gains tax on digital currencies like Bitcoin to just 10% if elected. Party chairman Zia Yusuf, speaking to reporters, articulated that this tax cut could potentially generate an additional £1 billion for the Treasury over a decade, a strategy he believes would stimulate adoption and encourage individuals to relocate their assets to the UK.

Currently, capital gains taxes on cryptocurrencies range from 18% to 24%, depending on the individual’s income tax bracket. Yusuf’s proposal aims to reverse the trend of diminished competitiveness, asserting that the UK is “losing ground” to other countries in the burgeoning digital asset market. He expressed confidence that such reforms would empower the financial services sector to "catapult itself back into being a leader," emphasising a necessary pivot towards embracing cryptocurrency.

The announcement coincides with remarks from party leader Nigel Farage, who has pledged to transform London into a global hub for digital assets. Addressing an audience at the Bitcoin Conference in Las Vegas, Farage urged the British population, particularly younger generations, to support their initiatives in bringing the country into the “21st century.” He reiterated the permanence of cryptocurrencies in the financial landscape, stating, “Let’s recognise that crypto, Bitcoin, digital assets, are here to stay.”

One of the pivotal measures proposed by Reform UK involves allowing taxpayers to settle their tax obligations in Bitcoin, alongside the establishment of a “Bitcoin reserve fund” designed to diversify the UK’s reserve holdings. This reflects a wider trend as cryptocurrencies gain traction; recent research indicates that approximately 12% of UK adults own or have owned crypto assets, a significant increase from just 4% in 2021. This rising popularity has prompted official channels to take notice, with Chancellor Rachel Reeves announcing plans to regulate crypto assets rigorously, aiming to position the UK as a “world leader” in this sector.

Contrastingly, the UK government has also taken steps to tighten its grip on crypto taxation and compliance. From 2025, taxpayers will be required to declare their crypto assets separately on tax forms, a change that aims to recover up to £10 million annually for public services. Moreover, the UK has joined 48 other nations in a historic agreement to combat the misuse of crypto assets for tax evasion, introducing the Crypto-Asset Reporting Framework (CARF) that will facilitate the sharing of taxpayer information between countries. This demonstrates an increasingly rigorous approach to ensure tax compliance within the rapidly evolving digital currency landscape.

In a sign of the shifting tides in public perception, Reform UK has already begun accepting cryptocurrency donations, marking a pioneering move in the political fundraising sphere. Yusuf confirmed these contributions are compliant with Electoral Commission regulations, a promising development for how political entities might engage with the evolving landscape of digital financing.

This legislative push comes as a multitude of other sectors, including charities, are starting to embrace cryptocurrencies. For instance, JustGiving has recently begun accepting donations in various cryptocurrencies, aiming to attract a wider donor base. This shift underscores the changing dynamics of fundraising and illustrates the potential for cryptocurrencies to enhance financial opportunities across diverse fields, despite the accompanying risks of volatility and regulatory scrutiny.

As Reform UK positions itself at the forefront of advocacy for cryptocurrency, the implications for broader public policy and the economic landscape remain to be fully realised. The proposals, if implemented, could mark a significant shift in the UK's financial framework, one that could attract innovation while navigating the complexities of regulation and compliance inherent in the cryptocurrency space.

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Source: Noah Wire Services