Taxation of non-fungible tokens

Non-fungible tokens (NFTs) have been around for nearly a decade. Although they exist on a blockchain and use the same technology as cryptocurrencies the non-fungible component means that every NFT created is unique and cannot be replaced. By contrast physical money and cryptocurrencies are fungible meaning they can be traded and exchanged. Acting as digital assets NFTs could be photos videos audio files or a myriad of other digital formats.

But it is only in recent years that we have seen NFTs surge in popularity gaining widespread attention and becoming a mainstream phenomenon for – businesses and consumers alike. Although the frenzy surrounding NFTs peaked in 2021 the market is anticipated to grow to $80bn by 2025 so these digital assets are still a lucrative opportunity for businesses across a variety of sectors.

However there are still...