UK Capital gains or Income Tax for Airdrops

Hi. The guidelines on airdrops on the HMRC site are pretty vague.
If you get regularly airdropped tokens for owning NFTs (Alien Worlds) is this classed as income?

Hi Chuqu,

It depends on the type of Airdrop actually.
This is form our UK tax guide:
image

Thanks. Yeah I read the guidance, just wasn’t sure whether it counted as ‘part of a trade or business involving crypto’
I also asked HMRC on Twitter and they couldn’t give me a direct answer.

For future reference, I was advised (by a crypto tax firm on Twitter) that it counts as income, so liable for income tax at receipt, and then any capital gains on disposal.

My interpretation of HMRC rules as an individual is only capital gains tax applies but as its a airdrop you assume it had zero cost. So when you sell it proceeds are 100% capitals gains. Then the question is are you over your allowance or not. If over you pay 20% tax on the proceeds.

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