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Coinbase owners in the UK who have received more than £5,000 ($6,474) in cryptocurrency will have their details passed to the UK's tax authority HMRC, according to an email from Coinbase seen by Decrypt.
The email said that HMRC originally required Coinbase to provide certain records of its UK customers, between 2017 and 2019. However, after discussions with the tax authority, the notice was revised so that it only affects users that meet some minimum requirements.
"Based on further discussions with HMRC, a revised noticed was issued with reduced scope that now requires the disclosure of customers with a UK address who received more than £5,000 worth of crypto assets on the Coinbase platform during the course of the 2019/2020 tax year," the email stated.
This doesn't come as a big surprise. Last year, HMRC sent letters to multiple crypto exchanges, requesting information on UK residents that had moved money using the exchange between 2017 and 2019. This request is likely the original notice that Coinbase was referring to.
However, by negotiating with HMRC it seems that the exchange has reduced the amount of information it will be sending to the tax authority—particularly focusing on investors that have received greater amounts of cryptocurrency.
UK citizens are still required to pay capital gains tax if their cryptocurrency has gone up in value, above the minimum threshold. Any information that HMRC receives will likely be used to check if individuals are reporting their own taxes correctly.