Bitcoin investors in the UK have been dealt a blow, after HMRC ruled that they would not be allowed to classify their investment in the cryptocurrency as "gambling", winnings from which are tax-free.

In a long-awaited policy paper, released on Wednesday, HMRC clarified that it did "not consider the buying and selling of cryptoassets to be the same as gambling".

It said that digital currencies counted as "chargeable assets" for capital gains tax if they were both capable of being owned, and had a value that could be realised.

"In the vast majority of cases, individuals hold cryptoassets as a personal investment, usually for capital appreciation in its value or to make particular purchases. They will be liable to pay capital gains tax when they dispose of their cryptoassets," it added.

The latest paper comes almost four years after HMRC last issued official guidance on how to classify cryptocurrencies, at which point it had suggested that transactions could be "so highly speculative" that winnings from such activity may not be taxed.