UK Capital gains or Income Tax for Airdrops

[chuqu]

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?

[Petur_Koinly]

Hi Chuqu,

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

[chuqu]

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.

[Adrian_Mann]

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.