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UK’s HM Revenue and Customs [HMRC] Department recently released a set of legislation to chalk out “designated crypto assets.” Transactions involving such assets In the summer of 2025, the UK government consulted on extending the scope of the UK investment manager exemption (the ‘UK IME’) to include direct transactions in The government says its intention is to provide tax certainty to investment managers seeking to include types of crypto-assets in portfolios and encourage new crypto (1) These Regulations may be cited as the Investment Manager (Investment Transactions) (Cryptoassets) Regulations 2025 and come into force on 1st January 2025. (2) These HMRC has now introduced regulations 1 to include certain cryptoassets as “investment transactions” within the scope of the UK IME with effect from the tax The draft Order will also remove the current exemption for cryptoasset businesses registered with the FCA under the Money Laundering Regulations 2025 (“MLRs”). Firms which are only

UK Extends Investment Manager Exemption to Include Crypto Holdings

The UK government is taking steps to solidify its position as a forward-thinking hub for digital assets. A key development is the extension of the UK Investment Manager Exemption (UK IME) to encompass crypto holdings, providing greater tax certainty and potentially attracting further investment into the sector.

In the summer of 2025, the UK government consulted on extending the scope of the UK investment manager exemption (the ‘UK IME’) to include direct transactions in crypto assets. The government says its intention is to provide tax certainty to investment managers seeking to include types of crypto-assets in portfolios and encourage new crypto investment.

HMRC Clarifies Crypto Asset Definitions and Regulations

UK’s HM Revenue and Customs [HMRC] Department recently released a set of legislation to chalk out “designated crypto assets.” Transactions involving such assets are now more clearly defined under the updated regulations. This clarity is crucial for investment managers seeking to navigate the evolving landscape of digital finance.

These Regulations may be cited as the Investment Manager (Investment Transactions) (Cryptoassets) Regulations 2025 and come into force on 1st January 2025.

What This Means for Investment Managers

HMRC has now introduced regulations to include certain cryptoassets as “investment transactions” within the scope of the UK IME with effect from the tax year. This is a significant step towards mainstreaming crypto within traditional investment frameworks.

Implications for Cryptoasset Businesses

It's important to note that the draft Order will also remove the current exemption for cryptoasset businesses registered with the FCA under the Money Laundering Regulations 2025 (“MLRs”). Firms which are only involved in certain crypto activities should carefully review the implications of this change.

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