CARF is a global initiative developed by the Organisation for Economic Cooperation and Development (OECD). It provides for the automatic exchange of tax information on transactions in cryptoassets by tax authorities.
In October 2024, HMRC published draft regulations to bring the CARF into UK law. The regulations require RCASPs to collect details of cryptoasset owners and transactions and to report that information to HMRC for exchange with other tax authorities. The rules are expected to come into force in 2026 with the first exchange of information between tax authorities in 2027.
ICAEW believes that the implementation of CARF in the UK presents a significant challenge for cryptoasset owners, RCASPs and HMRC. In particular, the requirement for RCASPs to obtain a self-certification from cryptoasset users, and to confirm the ‘reasonableness’ of that self-certification, may prove onerous for all involved.
In an open letter written jointly with six other bodies, ICAEW has said it will work to address uncertainty around CARF. This includes:
- raising awareness by publishing information on CARF;
- developing suggested wording for self-certification. This will be proposed to the OECD as best practice; and
- working with HMRC to ensure it understands the challenges for RCASPs and cryptoasset users in complying with the rules.
Further information
- The recent TAXline article What’s CARF got to do with it? explains the background to CARF and considers the possible implications for cryptoasset users and RCASPs.
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