Crypto and UK tax: what to know about Capital Gains Tax

Cryptoassets are high-risk and unregulated in many respects, and their prices can swing sharply. Alongside the investment risk, UK holders also need to understand the tax position. This guide outlines the general principles; your circumstances may differ.

How HMRC generally treats crypto

For most individuals, HMRC treats cryptoassets as property for tax purposes, and Capital Gains Tax (CGT) may apply when you dispose of them. A disposal can include:

• Selling crypto for pounds
• Swapping one cryptoasset for another
• Using crypto to pay for goods or services
• Giving it away (other than to your spouse or civil partner)

Simply buying and holding is not usually a taxable event.

Annual exempt amount

Individuals have an annual CGT exempt amount, and gains above it may be taxable at rates that depend on your income. The allowance and rates have changed in recent years, so check the current figures on gov.uk.

Records you should keep

1. Date of each transaction
2. Type of asset and number of units
3. Value in pounds at the time
4. Any fees paid
5. Wallet and exchange details

Specific HMRC rules for matching purchases and sales (including same-day and 30-day rules, and pooling) mean accurate records are essential. Crypto income, for example from some types of staking or employment payments, may be subject to Income Tax instead.

Staying safe

• Only use firms that are registered with the FCA for anti-money-laundering purposes.
• Be wary of promises of guaranteed returns; scams are common.
• Never invest more than you can afford to lose.

If your affairs are complex, consider speaking to a tax professional.

This article is general information, not personal financial advice. Rules and allowances change, so always check the latest position on gov.uk or with a regulated adviser.