NFTs explained for UK holders
Quick answer: NFTs are cryptoassets for HMRC purposes in most cases. Buying and selling can trigger CGT. Owning an NFT does not automatically give you copyright in the underlying artwork.
NFTs (non-fungible tokens) represent unique digital items on a blockchain. UK tax and regulation depend on what the NFT represents and how it is used.
What NFTs are
An NFT is a token on a blockchain that points to or represents a digital or linked physical item. Ownership of the token is recorded on-chain; the media file may be stored separately.
Tax on NFT trades
Selling an NFT for crypto or fiat is a disposal. If you create and sell NFTs regularly, HMRC may treat you as trading — Income Tax would apply instead of or as well as CGT.
Regulatory status
The FCA considers NFTs on a case-by-case basis. Collectible NFTs may fall outside the regulatory perimeter; NFTs packaged as investments may not.
Frequently asked questions
Do I own the image if I buy the NFT?+
You own the token, not necessarily the intellectual property. Check the terms of the sale.