Cryptocurrency transactions in the UK are subject to specific tax rules, mainly Capital Gains Tax and Income Tax. In this article, you’ll find out which transactions are taxable, whether they fall under CGT or income tax, and many more important details.
Capital gains tax
When you dispose of your cryptoassets, such as by selling, trading, or spending them, you may be liable to pay Capital Gains Tax (CGT) in the UK.
Disposals that trigger a capital gain or loss
The following are common types of outgoing transactions that trigger capital gains calculation in the UK:
selling, exchanging crypto for GBP or another fiat currency
swapping, swapping crypto for other cryptocurrencies, including stablecoins
payments, using crypto to purchase goods or services
gifting, giving crypto away (unless the recipient is your spouse or civil partner)
deposit on DeFi, depositing crypto on DeFi platforms, receiving other crypto in return
Disposals that don't trigger a capital gain or loss
The following are common types of outgoing transactions that don't trigger capital gains calculation in the UK:
internal transfer, sending crypto from one of your wallets or exchanges to another of yours
deposit on DeFi, depositing crypto on DeFi platforms without receiving other crypto in return
Capital gains tax rates
Here you can check the CGT tax rate that applies to the 2024-25 fiscal year.
2024-25 CGT Tax Rates | Before 30 October | After 30 October |
Total income below £50,270 | 10% | 18% |
Total income above £50,270 | 18% | 24%
|
ℹ️Remember:
Total income refers to the sum of all your income during the fiscal year, not just your capital gains. This includes salary, self-employment, investments, and any other taxable income, and it determines which Capital Gains Tax rate applies to you.
⚠️ CGT adjustment if you made any capital gain after 30 October 2024
HMRC’s software currently calculates Capital Gains Tax using only the 10% and 18% rates. If you have made any capital gains after 30 October 2024, you must calculate and declare the capital gain adjustment to ensure you pay the correct amount of tax. For more information, please refer to this article.
Capital gains tax allowance
The Capital Gains Tax allowance (also called the “Annual Exempt Amount”) is the amount of profit you can make from selling or disposing of assets (including crypto) each tax year before you have to pay any Capital Gains Tax. If your total gains in a tax year are below this allowance, you won’t owe any CGT.
2022-23 Fiscal Year (report by 31st Jan 2024): £12,300
2023-24 Fiscal Year (report by 31st Jan 2025): £6,000
2024-25 Fiscal Year (report by 31st Jan 2026): £3,000
Example:
If you made £2,500 in crypto gains during the 2024-2025 tax year, you would not pay any Capital Gains Tax because your gains are below the £3,000 allowance. If you made £5,000 in gains, you would only pay tax on the amount above the allowance—that is, on £2,000.
How to calculate capital gain
Capital Gain = Sale Proceeds – Cost Basis
Sale Proceeds: The GBP amount you receive from selling or disposing of your crypto.
Cost Basis: What you paid to acquire the crypto, including any transaction fees. If you received the crypto through an airdrop or fork, the cost basis is the fair market value in GBP on the day you received it.
To learn more about the methods used to calculate capital gains and losses, please take a look at the dedicated article.
Capital Loss
You can offset any amount of capital losses against your gains, reducing your taxable gains down to the annual allowance. Registered losses can be carried forward indefinitely, but must be reported on your self-assessment tax return—ideally in the year they occur, and no later than four years after.
Can I consider lost or stolen crypto as a loss?
Lost and stolen crypto (for example, if you lose your private key) is not automatically a capital loss. You can only claim a loss if you make a successful negligible value claim, which is possible if the tokens still exist but are inaccessible.
Income Tax
In the UK, income tax on crypto applies when you receive cryptocurrency as a form of income. However, not all incoming transactions are treated as income for tax purposes.
Income-generating receipt
Individuals will be liable to pay Income Tax and National Insurance contributions on crypto assets that they receive from:
employment Income, receiving your salary or wages in cryptocurrency
mining Rewards, earning crypto as a reward for validating transactions on a blockchain
staking Rewards, receiving crypto for participating in transaction validation or by locking up funds to support network operations
fixed returns on CEXs, earning rewards by locking your crypto on a centralized exchange
taxable airdrops, obtaining crypto in exchange for acting, such as promoting a project or using a specific service
liquidity pool rewards, earning rewards by providing liquidity to DeFi protocols
lending rewards, receiving interest or rewards for lending your crypto assets to others
hard forks, receiving new coins as a result of a blockchain splitting into two separate chains
There may be cases where the individual is running a business that is carrying on a financial trade in crypto assets, and they will therefore have taxable trading profits. This is likely to be unusual, but in such cases, Income Tax rules would take priority over the Capital Gains Tax rules.
Non-income-generating receipt
There are situations where receiving cryptocurrency does not constitute taxable income. This includes:
purchase, purchasing crypto with fiat currency
gift, receiving crypto as a gift
internal transfer, incoming transactions resulting from transfers between your own wallets
inheritance, inheriting crypto assets (which may be subject to inheritance tax, but not income tax)
Where to Report Your Crypto
Crypto taxes are filed as part of the Self Assessment Tax Return. In summary:
Crypto Capital Gains and Losses: SA100 and Capital Gains Summary SA108
Crypto Income: Box 17 of your Self Assessment Tax Return (SA100)
To learn more about the declaration obligations for crypto in the UK and how to declare your crypto assets, please take a look at the dedicated article.
Tax and declaration deadlines
The UK tax year runs from 6 April to 5 April of the following year. Taxpayers must report and pay any taxes due by 31 October (if submitting a paper return by post) or by 31 January following the end of the tax year (if filing online). For example, for the 2022–2023 tax year, the deadline is 31 January 2024 for online submissions.