British tax authority to ditch levy on bitcoin trading

Ruling based on EU law that exempts payments and transfers of ‘negotiable instruments’ from tax

The UK’s welcoming approach to bitcoin contrasts with the approach of other countries, amid concerns about its use for tax evasion and money laundering. Photograph: Reuters/Jim Urquhart

The UK’s welcoming approach to bitcoin contrasts with the approach of other countries, amid concerns about its use for tax evasion and money laundering. Photograph: Reuters/Jim Urquhart

 

Britain’s tax authority plans to ditch its levy on bitcoin trading only days after the collapse of Mt Gox, one of the virtual currency’s leading exchanges, losing almost $500 million (€363 million) of customer deposits.

Mt Gox was sued for fraud by a US customer within hours of filing bankruptcy.

The exchange filed for bankruptcy on Friday in Tokyo, saying in a statement its debt exceeded its assets by 2.7 billion yen.

“This catastrophic loss has not only revealed the instability of a burgeoning new industry, it has also uncovered a massive scheme to defraud millions of consumers into providing a private company with real, paper money in exchange for virtual currency,” Illinois resident Gregory Greene said in a complaint in federal court in Chicago.

The UK’s welcoming approach to bitcoin contrasts with the approach of other countries, amid concerns about its use for tax evasion and money laundering.

The ruling bases its policy on the EU law that exempts payments and transfers of “negotiable instruments” from tax. – (Copyright The Financial Times Limited 2014 / Bloomberg)