Urgent Global Tax Changes: UK Farmers & Crypto Investors Targeted as Authorities Tighten Grip. Crackdowns and International Tax Shifts in Italy, Spain and beyond

Date: 28 Mar 2025

Karen Jones

Gary Ashford, Tax Partner who is a non-lawyer, at Harbottle with expertise in contentious tax and who has previously worked at HMRC. “Clearly, with the end of the Non-Dom system many of those Non-Dom’s are now looking for new ‘homes’.”

Urgent UK tax changes for farmers and crypto Investors

Ashford continues, “Some of the places of interest are Portugal, Switzerland, Italy, UAE and Cyprus.  It is difficult to comment on different countries tax authorities to deal with as when a UK adviser helps move a client overseas, there will usually be an overseas adviser doing the overseas authorities liaison work. Thinking of farmers UK for that and IHT plan.  The BPR and APR rules change in 2026, a lot of work will be required ahead of that time to help farmers and other business people (BPR) to prepare for the changes. Insurance products have their place for some clients.  They can be internationally portable which can be useful.”  

Stricter tax enforcement measures

Alessandro Belluzzo, Barrister and Founding Partner at Belluzzo International Partners, based in London and with offices in Italy and who have also recently opened in Abu Dhabi says of UK tax, “The UK’s new government is implementing stricter tax enforcement measures. Chancellor Rachel Reeves announced a £1 billion crackdown on tax evasion, empowering HMRC with advanced technology and increased capacity to combat tax avoidance. This initiative aims to raise an additional £1 billion, bringing total revenue from anti-evasion efforts to £7.5 billion. Furthermore, starting in April 2025, penalties for late filing of self-assessment tax and VAT returns will increase.  This change affects landlords and the self-employed using HMRC’s Making Tax Digital system.” 

Keep informed of tax policy changes in your country

Belluzzo continues, “The abolition of the UK’s “Non-Dom” regime has led some wealthy individuals to reconsider their residency. The introduction of an IHT tax on businesses and the increase scrutiny of HMRC are among reasons high earners seeking more favourable tax jurisdictions. My recommendations are to stay Informed and regularly monitor tax policy changes in your country of residence and other jurisdictions where you have financial interests. Secondly to consult with tax professionals experienced in international tax law to navigate regulations and to streamline estate planning strategies. Finally, to maintain accurate records and ensure timely compliance with tax obligations to avoid penalties and legal issues. Applying for tax rulings, like the one that is issued by the Italian Tax Authority when you apply for the Flat Tax regime will assure that you are protected by the law and that you will not have any tax consequences.”

UK crypto tax – global bank accounts information exchange to tax authorities 2026

Ashford adds, “On the topic of crypto, the main news is the Government draft legislation for the Crypto Asset Reporting Framework due to come in in 2026.  This will have the potential to align crypto with wider overseas bank accounts and the information will be exchanged to tax authorities around the world.”

HMRC extending their reach and powers on crypto

Louise Lane, Head of Crypto Assets at Wright Vigar chartered accountants and a recent Gold award winner for fintech and crypto at the Citywealth Powerwomen 2025 awards agrees with Ashford saying, “HMRC really are ramping up their tax investigation activity. The Chancellor was clear in the Autumn Budget that HMRC are committed to tackling non-compliance and reducing the tax gap created by those who are not declaring and paying their taxes. It is a key priority. A recent consultation on this topic sought views on HMRC extending their reach and powers in tackling this.”

Lane explains, “Most UK crypto investors are still unaware of the tax consequences of their transactions and misguidedly think tax is only payable when they off-ramp and cash out their crypto for fiat (GBP, USD etc). However other disposals for capital gains purposes include swaps of one crypto for another, using crypto to pay for anything like transaction fees and some DeFi type activity. Also, a common trap is failing to treat crypto income as taxable at the time of receipt.”

UK 2024/25 tax return will introduce separate boxes to declare crypto assets

Lane adds, “FCA research last autumn found 12% of UK adults are holding crypto. Although not all of these 7 million adults will have tax to declare, it is increasingly difficult to stay below the £3,000 annual CGT annual exemption. The HMRC knows that only a minority of UK individuals with crypto activity are up to date with their tax obligations. Over the last 6 months we have seen increased activity from HMRC tackling crypto non-compliance, with the launch of a formal Crypto Disclosure Service and HMRC issuing targeted ‘nudge letters’ to individuals they think have not declared their crypto activity. The 24/25 tax return will introduce separate boxes to declare crypto assets, which is a sure sign that HMRC are going to be paying closer attention to who is declaring crypto.”

CARF – OECD Crypto-Asset Reporting Framework to mirror Common Reporting Standard

Laura Knight, Founder and Director at Knightbridge Tax with twenty years tax and accounting experience, talks further on crypto assets, adding information on the upcoming disclosure arrangements mentioned by Ashford. “The OECD Crypto-Asset Reporting Framework (CARF), is set to take effect from 1 January 2026 with data exchange from 2027 with 50 jurisdictions currently signed up the CARF which requires crypto asset service providers (CASPs) such as exchanges, wallet providers, and other intermediaries to report information on their users. They will be required to carry out KYC and to collect and report specific standard data about their users’ crypto transactions to tax authorities covering transactions like sales, exchanges, and transfers of crypto assets. Tax authorities worldwide will then automatically exchange this data under a standardised international framework, like the Common Reporting Standard (CRS) for traditional financial accounts. It will be interesting as to how the different tax authorities cope with the mass datasets and how they will use that data, but the expected impact will be more investigations and letters to taxpayers to come forward if they have not reviewed or reported their crypto asset transactions already. For crypto activity from 1 January 2026, the new Crypto asset Reporting Framework (CARF) will ensure that domestic and worldwide crypto activity by UK investors is reported automatically to HMRC. HMRC will presumably be cross-checking this information to tax returns filed to ensure they target those who are non-compliant.” 

USA tax – Trump gutting the Internal Revenue Service – how will they enforce tax collection?

Joshua Rubenstein, Partner and National Chair, Private Wealth, Katten Muchin Rosenman based in New York adds his troubled view of the US. “The private client tax landscape is in a major state of flux in the US.  It is all but certain that our generous estate tax exemptions of nearly $14 million per person will not phase back at the end of the year.  Trump is of course promising tax cuts for all on top of that.  Perhaps his largest tax “cut” is his gutting of Internal Revenue Service, who will now be very hard pressed to enforce tax collection.  But Trump is also attacking the judiciary (calling for impeachment of judges who rule against him) and attacking law firms who take positions adverse to him.  So, who knows how well the courts will work, or what law firms might need to do to protect themselves along with their clients.  It’s a Mad, Mad, Mad, Mad world, ” Says Rubenstein, referencing a 1963 American epic comedy film produced and directed by Stanley Kramer.

Italian tax – is there retrospective trouble with the flat tax regime?

There have been some questions about moves to Italy not being so straightforward with undue interest from the tax authorities after using the Flat Tax Regime.  Following the publication of the Citywealth Top Italian advisors and managers list, we took the opportunity to ask leading experts in Italy.

Tax audits are mainly focused on dismantling numerous frauds

Giuseppe Violetta, Counsel at VEF & Partners responsible for trusts and wealth planning, and founder of the multi-family office FP&Partners SCF in Milan gave his view. “My impression is that, at this historical moment, tax audits are mainly focused on dismantling numerous frauds carried out by various organizations. These are mostly related to tax credits arising from building renovation incentive schemes, so-called carousel frauds, and the phenomenon of false invoicing. The large family estates that have settled in Italy over the years are not at all targeted by the tax authorities, provided they have not used the favourable tax regime to ‘clean’ the origin of foreign funds. In such cases, the issues are indeed significant, especially from a criminal law perspective. However, if a wealthy family has simply ‘forgotten’ some formal requirements or was unaware of them and is assisted by professionals specialized in cross-border tax litigation, such as a law firm, the dialogue with the tax authorities although serious is also constructive. There are several legal provisions that allow the situation to be regularized without incurring heavy financial consequences or reputational damage.”

Taxation in Italy is part of broader European tax reforms

Alessandro Belluzzo, Barrister and Founding Partner at Belluzzo International Partners who have also recently opened in Abu Dhabi and who have a seminar on the topic of moving to Italy on the 3rd of April in London says, “Italy has revised its tax policies, particularly for new residents. In 2024, Italy increased its lump-sum tax for wealthy new residents, impacting expatriates and high-net-worth individuals but these changes are part of broader European tax reforms aimed at ensuring equitable taxation and stabilising economies.”

Regime straightforward to access and beneficial

Giulia Cipollini, Partner and international tax lawyer in the Milan office at Withers, agrees with this sentiment, “We have been advising individuals on Italy’s flat tax regime since it was introduced in 2017 and have not encountered any examples of aggressive actions or verification procedures from the Italian tax authorities. In our experience the regime has been straightforward to access and beneficial for those who adopt it.”

Stefano Grilli, Partner at Deloitte in Milan confirms Cipollini’s view. “I would tend to disagree about the aggressiveness of the Italian tax collection agency. Italian tax authorities are pretty aggressive in performing tax audits but the collection is an endemic problem. Consider that there are around 1.2 billion of tax revenues already audited or ultimately decided by tax courts to be collected.”

Italian crypto tax increases stifle innovation

Marco Sandoli, Tax Partner at Alma LED, Milan, who has a specialism in tax for individual assets and tax litigation, says, “The Italian Budget Law for the fiscal year 2025 introduced some changes that worsen the cryptocurrency taxation. In particular, capital gains derived from cryptocurrency transactions are still taxable at a flat rate of 26% until the end of 2025, but starting from January 2026 the rate will increase to 33%. In addition, the previous yearly exemption threshold of €2,000 has been removed from 2025, making all gains taxable regardless of their amount. If small capital gains must be taxed, also small investors must pay compliance costs. It is still possible to step up the tax cost of the cryptocurrency but the rate of the step-up tax increases from 16% to 18%. This change creates uncertainty and concern in the Italian cryptocurrency market. I see the following risks: unequal treatment: financial instruments such as ETFs and crypto futures will continue to be taxed at 26% from 2026, penalizing crypto holders in private custody who will pay 33%. Loss of competitiveness: Italy risks losing investors to foreign markets with more favorable tax regimes, for example in Dubai. Risk to the ecosystem: a high tax burden could slow development and innovation in the Italian crypto sector.”

Spain – Spanish Tax Agency’s (AEAT) enforcement accused of employing aggressive tactics

Belluzzo adds his thoughts on the Spanish tax system. “Spain has introduced multiple tax reforms aimed at increasing revenue. As of January 1, 2025, nine taxes have been raised, projected to generate an additional €4.5 billion. Despite achieving record collections close to €300 billion in 2024, Spain’s tax burden remains below the EU average. These reforms include adjustments to corporate tax rates and the introduction of new taxes on financial entities and certain products. Additionally, concerns have been raised about the Spanish Tax Agency’s (AEAT) enforcement practices. International law firms and foreign workers have accused the AEAT of employing aggressive tactics, creating barriers to fair appeals for expatriates.”

https://www.citywealthmag.com/news/citywealth-leaders-list-interview-60-seconds-with-giuseppe-violetta-vefp-vittorio-emanuele-falsitta-partners/

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