{"id":788,"date":"2022-07-10T08:08:21","date_gmt":"2022-07-10T08:08:21","guid":{"rendered":"https:\/\/taxtribe.co.uk\/?p=788"},"modified":"2022-07-10T08:08:21","modified_gmt":"2022-07-10T08:08:21","slug":"what-exactly-are-nfts-and-what-are-their-tax-implications","status":"publish","type":"post","link":"https:\/\/taxtribe.co.uk\/what-exactly-are-nfts-and-what-are-their-tax-implications\/","title":{"rendered":"What Exactly Are NFTs, and What Are Their Tax Implications?"},"content":{"rendered":"

If you\u2019ve been reading the news lately, then you\u2019ve heard of NFTs: non-fungible tokens. Essentially, these are unique pieces of code that underlie a piece of digital media, such as a photo, artwork, song or video. While the media can be viewed and shared by anyone, owning the NFT gives the buyer exclusive ownership of the original. In Luddite terms, it\u2019s like buying Michelangelo\u2019s David and putting it on public display.<\/span><\/p>\n

From one angle, this just makes historical sense. People have always put their money to good use by buying art and supporting artists. But NFTs are very new, and it isn\u2019t always obvious how they fit with the more traditional understanding of assets (for buyers) and income sources (for sellers). We\u2019ll demystify some of that in this post.<\/span><\/p>\n

NFTs and HMRC<\/b><\/p>\n

As with cryptocurrencies, it took a little while for the legal and tax establishment to catch up with the existence of NFTs. However, while this is a fast-moving area of legislation, the principles at work are relatively straightforward. They can be outlined as follows:<\/span><\/p>\n