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      After a change in previous policy, from 8 October 2025, the Financial Conduct Authority (FCA) has once again permitted Cryptoasset Exchange Traded Notes (cETNs) to be held by retail customers under cryptocurrency and suitability rules. Previously the sale to retail customers was prohibited and restricted to professional investors.

      On the same day, HMRC published guidance on the tax treatment of cETNs. HMRC note that cETNs could be held in a stocks and shares ISA from 8 October 2025 but, from April 2026, the legislation will be limited to being held in Innovative Finance ISAs. This means that ISA managers operating with stocks and shares accounts can offer these products to customers today, but would need to apply for permission and maintain separate ISA wrappers in order to continue holding cETNs for investors. Conversely, those ISA managers who are only permitted to offer Innovative Finance ISAs will not be able to offer products to customers today but will be able to from 6 April 2026 onwards. HMRC note that “The Government will keep the inclusion of cETNs in tax-advantaged accounts under review with a view to including them in the stocks and shares ISA at a later date as the market matures and as consumer understanding deepens.”

      HMRC state that cETNs will also be permitted to be held inside pension products.

      It should be noted that cETNs are traditional financial instruments on which the return is tied to the performance of certain cryptoassets. This is distinct from tokenised financial instruments, which are traditional financial instruments held in a tokenised form.

      David Wren

      Partner, Operational Tax

      KPMG in the UK

      For further information please contact:

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