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Inland Revenue is giving a lot of thought to taxation issues, which affect crypto-currencies.

They see these as property and not currency. Therefore, capital gains and losses from fluctuations in value would not apply.

However, if the currency is bought for the purpose of disposal, the profits made from selling it would be taxable.

What if you made a loss, would you be able to claim this? You would need to be able to prove you really did buy the currency for the purpose of selling it at a profit. A series of short-term transactions would suggest this, particularly if you had already declared profits to the tax department.