IEIM8000220 - Is it a Cryptoasset for CARF Purposes?
The definition of a cryptoasset for CARF purposes is functional and includes any digital representation of value that relies on a cryptographically secured distributed ledger or similar technology to validate and secure transactions.
Further guidance on what is a cryptoasset for UK tax purposes can be found within Introduction to cryptoassets: what are cryptoassets
Digital representation of value
A ‘digital representation of value’ means that a cryptoasset must
- Represent aright to value, (which includes tokens that allow users to store value or make payments, even if they do not represent claims or rights of membership against a person, rights to property, or other absolute or relative rights), and
- that ownership, or right to, such value can bedigitally traded or transferred between individuals or entities.
Technological Reliance
For
the purposes of the CARF, a cryptoasset must rely on cryptographically secured
distributed ledger technology (DLT)orsimilar technology to validate and secure
transactions. ‘Similar technology’ includes any system that enablesdisintermediated holding or validationof cryptoassets, regardless of software type.