Inland Revenue has recently released a public ruling statement, PUB 19/04 which considers the income tax treatment of specific types of employer-issued crypto assets provided to employees.

The statement follows on from three other public rulings that explain the tax implications when crypto assets are used to pay salary and wages, bonuses or when an employer issues its own crypto assets and offers them to an employee.

The statement states what a share is for tax purposes and when crypto assets are issued to employees as a share (i.e. an interest in the capital of a company etc.).

This ruling applies in circumstance where:

  • The employer is issuing crypto assets as part of an initial coin offering or a token generating event
  • The crypto asset is a share
  • The employee is not required to pay market value for the crypto assets
  • The arrangement is not an exempt ESS.

However, Inland Revenue considers that most assets will not have features of shares and so will fall outside of the employee share scheme rules.