AlexL

Hi HMRC Admin, What happens if a person receives a large sum of crypto in the form of rewards, such that this sum is taxable as income. Prior to paying the tax on that income the market value of the crypto currency plummets to orders of magnitude less than the value when the rewards were originally recieved. Ultimately, if capital losses cannot offset income tax then there are perfectly plausible situations where individuals will be left with no means to pay their income tax through no fault of their own. Would you provide some further guidance on this matter please. I read the document linked to above, and it does cover this scenario. Thanks in advance.

My understanding is that crypto currencies are subject to income and capital gains tax. Capital gains takes allows for capital losses of one asset to offset capital gains of another (in terms of tax liability). Is there a comparable allowance for income tax? i.e. In a theoretical situation, suppose an individual receives £100,000 in a crypto currency (market value at time of receiving it) in return for having delivered some product or service (therefore many thousands of pounds are now owed to HRMC in the form of income tax). Let's say that shortly after receiving this 'income' the crypto currency crashes and the market value has now fallen to practically zero. Is this individual now still liable to pay many thousands of pounds to the HMRC through absolutely no fault of their own? How are they expected to fund this?