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I have some bitcoin in an interest saving account. I am not sure if I have to consider the interest earned as Tax on Savings Interests (which does not mention anything related to crypto) or Cryptoassets: tax for individuals (which does not mention anything related to interests).

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    How are you holding bitcoin in a savings account? Do you have more information on this? Do you own bitcoin, or a savings fund invested in Bitcoin?
    – T Wildash
    Mar 3, 2020 at 11:07
  • Apart from holding them in cold storage, I also have some Bitcoin, USDC and ETH in interest savings accounts since around one year ago. The interest is paid monthly in each crypto. The service is called Blockfi. Mar 4, 2020 at 12:22

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Currently the key piece of information you would be interested in is here: https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals

You confused me about "savings account" but I see what you are inferring. You have an online account with cryptocurrency that pays interest. However as you will see in the link, since the UK government does NOT view bitcoin as currency, this is not a savings account in the traditional view, therefore Tax on savings interest is irrelevant here.

Therefore you are looking at capital gains tax (as mentioned in the link to the government information page) on disposal. Just view the in interest as having a cost of zero (although will average on disposal to whatever you paid for the rest). This is similar to having crypto in a staking wallet (which earns interest). This is exactly the same as how you would deal with the disposal on other stored crypto (such as what you have in cold storage)

If you are not disposing of them in the tax year, you will not have capital gains to declare, as you will only pay tax on disposal. The gains will count towards your capital gains limit - so for 2019-20 tax year, if you gain less than 20K profit (including all gains, e.g. from stock disposal, selling second property etc), you will not owe any tax.

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  • So sorry for the confusion. As you can imagine, it wasn't very clear to me! Thanks so much for your comment - very helpful indeed. You are a master! So I will have to worry about this when disposal. Just one observation, is not the capital gains allowance for 2019-20 tax year £12k instead of £20k as per gov.uk/capital-gains-tax/allowances ? Mar 5, 2020 at 19:00

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