Despite acknowledging that "there isn’t even consensus on what the implications of crypto are… when or whether we’re going to reach some kind of steady state… or even whether crypto itself is a good thing", Economic Secretary to the Treasury John Glen announced this week that Chancellor Rishi Sunak has jumped in with both feet, asking the Royal Mint to mint an NFT this summer, as "an emblem of the forward-looking approach we are determined to take".
For now, details are scarce on what exactly this NFT will be. As Tanja and I wrote recently, the term "NFT" covers a potentially very broad range of token characteristics, and an essentially limitless range of associated assets. More strikingly, the UK taxation of NFTs has so far been left comparatively unexplored. While HMRC has published a Cryptoassets Manual, it does not include NFTs in its "main types of cryptoassets", suggesting that the views expressed in the Manual may not necessarily apply to NFTs, except where they are explicitly referred to. Setting aside the debate around governments and decentralised technology, it remains an unusual predicament that a UK Government-issued asset should attract an unknown, untested UK tax treatment.
One can only assume that the Government expects this new NFT to generate some level of excitement, and therefore to be bought and sold. Clearly, that will have tax consequences for those doing the buying and selling - but what? To borrow another phrase from Glen's speech, "I don’t yet know the answer … but let’s find out."