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Understanding the Tax Treatment of HetraCoin (UK Jurisdiction)

HetraCoin is structured as a utility token, granting holders access to exclusive features, services, and benefits within the Hetrafi ecosystem. This section outlines the tax implications for both the HetraCoin Foundation (UK-based) and individual token holders, in accordance with UK tax laws.

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🔹 Tax Treatment for the HetraCoin Foundation (UK)

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Proceeds from HetraCoin Issuance:

  • Deferred Revenue Treatment: Funds raised from HetraCoin sales are treated as deferred revenue. Since HetraCoin grants future access to platform services, the revenue is not fully recognized until those services are delivered.

  • Revenue Recognition: Revenue is recognized for corporate tax purposes when the Foundation fulfills its performance obligations (e.g., enabling staking, governance features, or service access via HetraCoin).

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VAT (Value-Added Tax) Treatment:

  • Exempt from VAT: As per HMRC guidelines, utility tokens are generally outside the scope of VAT if exchanged for other tokens or used on-platform for access to services. However, standard VAT may apply to any goods or services purchased using HetraCoin if they are vatable.

  • Corporate Tax Obligations: Profits derived from token sales or the increase in token value held by the Foundation may be subject to Corporation Tax, depending on how they are recognized and used.

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🔹 Tax Implications for HetraCoin Holders (UK Residents)

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Acquiring HetraCoin:

  • Prepayment Classification: Purchasing HetraCoin is typically treated as a prepayment for future services within the Hetrafi ecosystem, not a taxable event in itself.

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Using HetraCoin:

  • No Direct Tax Trigger: Using HetraCoin to access services (e.g., tournament entry, marketplace usage) is not a taxable event, but the service received may be subject to VAT if applicable.

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Selling or Exchanging HetraCoin:

  • Capital Gains Tax (CGT): Gains from the disposal (e.g., sale, exchange, or conversion) of HetraCoin may be subject to Capital Gains Tax if the tokens are held as personal investments.

  • Income Tax (if trading): If individuals or businesses trade HetraCoin as part of a commercial activity, profits may be subject to Income Tax or Corporation Tax, rather than CGT.

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🔹 Record-Keeping & Compliance Responsibilities

Both the HetraCoin Foundation and UK-based token holders must maintain accurate records of:

  • Transaction Dates – For accurate tax timing and CGT calculations.

  • Token Values – At the time of each transaction (in GBP).

  • Purpose of Use – Whether for investment, trading, or service access.

These records are essential for meeting HMRC compliance requirements and should be retained for at least six years.

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✅ Conclusion

HetraCoin’s tax treatment under UK law recognizes it as a utility token, not a security or investment product. While standard purchases and platform use are not directly taxable, disposals and profits may trigger Capital Gains or Income Tax depending on usage.

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