Appendix 11: United Kingdom

Highlights

• Tax treatment of various virtual currencies varies based on how the virtual currency is used, rather than on the nature of the virtual currency itself.
• Charitable donations of virtual currencies exempt the donor from any capital gains taxes on those donated virtual currencies.
• The UK Parliament transposed the EU’s Fifth Money Laundering Directive in January 2020, which subjects UK virtual currency users to the EU’s more robust virtual currency restrictions and regulatory framework.

Virtual Currency-Specific Regulations

• HM Treasury et al., Cryptoassets Taskforce: Final Report (Oct. 2018)
• UK Financial Conduct Authority, Guidance on Cryptoassets Consultation Paper (Jan. 2019)
• House of Commons Treasury Committee, Crypto-assets Twenty Second Report of Session 2017-19 (Sept. 2018)
• UK Legislation National Archives, Payment Services Regulations 2017 No. 752 (PSR)
• UK Legislation National Archives, Electronic Money Regulations (2011)
• Security tokens: Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

Nonprofit Regulations

• UK Government, Charities and Tax
• UK Legislation National Archives, Charities (Protection and Social Investment) Act (2016)
• UK Legislation, Charities Act 2006, 2011;
• UK Legislation, Co-operative and Community Benefit Societies Act (2014)
• UK Charity Commission for England and Wales, Charities and Investment Matters: A Guide for Trustees (CC14) (2017)
• UK Charity Commission for England and Wales, Incorporation of Charity Trustees (2012)
• UK Legislation, Trustee Act (2000)

Tax Regulations

• HM Revenue & Customs, Cryptoassets for Individuals Policy Paper (Dec. 2018)
• HM Revenue & Customs, Brief 9: Bitcoin and Other Cryptocurrencies (2014)
• HM Revenue & Customs, Capital Gains Manual: Introduction and computation: chargeable assets: Intangible assets: Cryptocurrencies (2019)
• HM Revenue & Customs, Capital Gains Tax
• UK Legislation, Taxation of Chargeable Gains Act (1992)

Anti-Money Laundering Regulations

• UK Legislation National Archives, The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 No. 692 (2017)
• UK Legislation National Archives, Proceeds of Crime Act (2002)
• HM Treasury, Transposition of the Fifth Money Laundering Directive (Apr. 2019) [bringing cryptocurrencies within EU Fifth Anti-Money Laundering Directive (2018) and Consolidated Version (2015)]
• UK Financial Conduct Authority, Cryptoassets and Financial Crime (2018)

Other Relevant Regulations, Sources, Notes

• Financial Markets Law Committee, Issues of Legal Uncertainty Arising in the Context of Virtual Currencies (July 2016)
• UK Government Office for Science, Distributed Ledger Technology: Beyond block chain (2016)
• Practical Law, Charitable organisations in the UK (England and Wales): overview (2018)
• International Center for Not-for-Profit Law (ICNL), Nonprofit Law in England & Wales (2018)
• Law Library of Congress, Regulatory Approaches to Cryptoassets in Selected Jurisdictions: United Kingdom (April 2019)
• Global Legal Insights, Blockchain & Cryptocurrency Regulation (2019), “United Kingdom”
• Rhodri Davies, What do Cryptocurrency and Blockchain Technology Mean for Charities?, Charities Aid Foundation (accessed Jan. 23, 2020), https://www.cafonline.org/about-us/caf-campaigns/campaigning-for-a-giving-world/future-good/blockchain
• Charities Aid Foundation, Giving a Bit(coin): Cryptocurrency and philanthropy (May 2015), https://www.cafonline.org/docs/default-source/about-us-publications/givingabitcoin-cryptocurrency-philanthropy-may2015.pdf?sfvrsn=5