Divorce Financial Consultants and Law firms are increasingly coming across issues with disclosure about cryptocurrency holdings.
As we’ve looked at before cryptocurrencies are being treated as property under UK law and attract capital gains tax. This means that cryptocurrency assets and holdings should be disclosed. However, currently the financial statement disclosure in Form E does not include crypto assets as a question. Many firms think this needs to change. According to the legal press, disputes about crypto holdings are commonplace, with issues being heard every week.
However, with crypto wallets being anonymous, it can be difficult to be sure everything is being disclosed. It is also expensive to hire a forensic accountant to track any holdings down. If this is the case with divorce Financial Consultants warn, you might wonder if its also the case with tax disclosures as well?
How can you know? It might be worth keeping a note of any previous discussions that might have taken place about crypto, as a way of creating the suspicion that there may be some history of trading.
Non-disclosure is a very serious legal matter divorce Financial Consultants warn. It can result in fines but may also be considered a criminal offense in terms of perjury.
As we know cryptocurrencies remain unregulated. However, they are still counted by the Financial Ombudsman Service (FOS) in their figures. The latest FOS figures show complaints down to their lowest level for years. In the last three months 35,000 new complaints were registered, which was down on over 50,000 for the same period in 2021. Of these new complaints 30% related to investment scams. That is the highest level recorded. But, of these over half weren’t about investment scams but cryptocurrency scams. Not covered by FOS compensation.
Along similar lines. The FCA has said that it is scaling up its financial crime department and hiring 100 new analysts. This is in response to the rise in financial crime, combined with the cost-of-living crisis. Seven out of ten people claim that they have been targeted by a financial scam over the last three months. A shocking number.