CRYPTO41250 – Cryptoassets for business: Corporation Tax: Corporation Tax on chargeable gains – what constitutes a disposal – HMRC Internal Handbook

Companies need to calculate their gain or loss when disposing of their tokens to know if they have to pay corporate tax. An “elimination” is a broad concept and includes:

sell tokens for cash
exchange of tokens for another type of token
use tokens to pay for goods or services
give tokens to another person

If a company gives trading tokens to another company that is not a member of the same group (see CG45000 and following), or to an individual or other entity, the company giving them must calculate the market value of what she gave. . He must then use it to calculate any taxable gain. Likewise, the recipient is considered to have acquired the crypto-assets at their market value at the time of the donation.

There is no elimination if the company retains beneficial ownership of the tokens throughout the transaction, for example by moving tokens between public addresses that the company controls as the beneficiary (usually described as the moving tokens between wallets).

Using a mixer, tumbler, or similar service for the company to receive the same type of tokens they put in the transaction is also not elimination. However, it will constitute an assignment if the company puts token A in the transaction and receives token B in return.

If a liable person disposes of exchange tokens to a charity, they will not have to pay corporation tax on any accrued gain (see CG66620P). This does not apply if: