HMRC has published updated guidance clarifying the tax treatment of tokenised real world assets. The changes provide much-needed clarity for UK investors navigating this emerging asset class.
Key Updates
Token Classification
HMRC now categorises tokenised assets into three groups for tax purposes:
- Tokenised Securities — Treated as traditional securities for tax purposes
- Tokenised Commodities — Treated as tangible assets
- Tokenised Property — Subject to SDLT and property income rules
Capital Gains Tax Clarification
The updated guidance confirms:
- Tokenised assets are “chargeable assets” for CGT
- CGT applies on disposal (sale, exchange, or gift)
- The £3,000 annual exempt amount applies (2026/27)
- Bed and breakfasting rules apply to tokenised assets
DeFi Income Treatment
For the first time, HMRC has provided guidance on DeFi income from RWA tokens:
- Staking yields — Treated as miscellaneous income
- LP fees — Treated as miscellaneous income
- Rental distributions — Treated as property income
- Interest distributions — Treated as savings income
Practical Implications
- Record keeping — Maintain detailed records of all transactions
- Pooling — Tokens acquired at different times must be pooled for CGT
- Bed and breakfasting — Repurchasing within 30 days triggers matching rules
- Reporting — Must be reported on self-assessment tax returns
Areas Still Unclear
HMRC acknowledges some areas remain under review:
- Tokenised asset ISAs and SIPPs
- Cross-chain tax events
- Airdrops for governance tokens
- DAO participation and income classification
Recommendations
- Use crypto tax software (Koinly, Cointracking, Recap)
- Consult a specialist crypto tax advisor
- Keep separate records for each platform
- Maintain wallet-level transaction history
Disclaimer: Tax guidance is subject to change. This article is for educational purposes and does not constitute tax advice.