CRYPTO41050 – Cryptoassets for Business: Corporation Tax: Introduction – HMRC Internal Handbook

Companies are subject to corporation tax on their profits and gains. Corporation tax also applies to corporations that are members of a partnership or a limited liability company with respect to their share of the profits and gains of the company.

When calculating their corporate tax, companies must take into account all the token exchange transactions they have carried out (just as they would with any other type of asset).

It is important to note that HMRC does not consider any of the current types of crypto-assets to be money or currency.

This means that any corporate tax legislation that relates only to cash or currency does not apply to exchange tokens or other types of crypto-assets. For instance:

• foreign currency rules (Section 328 of the Corporation Tax Act 2009)
• the Disregard Regulations relating to foreign exchange gains and losses (Statutory Instrument 2004/3256)
• choice of designated currencies (Section 9A of the Corporation Tax Act 2010)

If the activity regarding the exchange token is not a commercial activity and is not charged to corporation tax in some other way (such as non-commercial loan relationship or intangible asset rules to CRYPTO41100 and CRYPTO41150 respectively), then the activity will be the disposal of an asset and any gain from the disposal would generally be charged to corporation tax as a taxable gain.

The processing of billable gains is described from CRYPTO41200.