HM Revenue and Customs (HMRC) has updated its cryptoassets tax guide to include provisions for staking and decentralized finance (DeFi).
Crypto staking is a process used to verify cryptocurrency transactions and involves committing holdings to support a blockchain network and confirm the transactions. It also allows participants to earn passive income on their holdings - your crypto also becomes a part of the process if you have staked it.
HMRC released several documents this week on the GOV.UK website, ahead of the current 2021/22 financial year ending on April 5, stating that crypto investors have to determine whether their returns fall under ‘income’ or ‘capital’.
