How will my cryptoasset investments be taxed?

After years of concern about under-reporting, HMRC can now automatically receive information from cryptoasset service providers about users and their transactions, bringing far greater transparency to cryptoasset taxation. 

In this article, we explain how cryptoassets are taxed for individuals and what HMRC expects when you buy, hold, and sell them, helping you to stay compliant. 

How does HMRC classify cryptoassets? 

HMRC does not consider cryptoassets to be currency for UK tax purposes. This means that gains or profits you make from cryptoasset transactions are taxable.  

The UK does not operate a specific tax regime for cryptoassets. Instead HMRC applies existing tax law, assessing the nature and use of the cryptoassets, to decide how a transaction should be taxed. 

When does Capital Gains Tax apply? 

In HMRC’s view, ‘in the vast majority of cases, individuals hold cryptoassets as a personal investment, usually for capital appreciation or to make particular purchases’. As a result, when you make a disposal, it will usually be subject to Capital Gains Tax (CGT). 

Higher and additional rate taxpayers currently pay CGT at 24%, while basic rate taxpayers pay 18%, depending on their total income and gains. 

When does Income Tax apply? 

Income Tax may arise where cryptoassets are received as earnings from employment, for example, where they are provided as a non-cash form of remuneration.  

Income Tax can also apply where cryptoassets are received through activities such as: 

• mining 
• staking, or  
• airdrops.  

If your crypto activity amounts to trading rather than investing, this may be subject to income tax. However, HMRC considers trading to be uncommon. In most cases, individuals are treated as investors and are subject to CGT on disposal of the cryptoassets instead of income tax on profits. 

When will I be taxed? 

Buying and holding 

Buying cryptoassets with cash and holding them does not trigger a tax charge. Even if the value of your holdings increases, tax is not charged until you make a disposal. 

Disposal 

When you dispose of a cryptoasset, you need to think about whether you have made a taxable gain or an allowable loss. Calculating this is not always straightforward, and you will need to consider factors such as allowable costs and the share pooling rules. These rules require each type of cryptoasset to be kept in their own pool to help simplify calculations.  

HMRC has a broad definition of disposals, and it includes situations where you: 

• sell cryptoassets for money 
• exchange one cryptoasset type for another type 
• use cryptoassets to pay for goods or services 
• give cryptoassets away to someone, other than your spouse or civil partner.  

How do I report cryptoasset gains to HMRC? 

You only need to report cryptoasset gains if your total gains for the year exceed the £3,000 CGT annual exempt amount or your total proceeds exceed £50,000. This reporting can be via your self-assessment tax return or the real capital gains tax service online. You can also claim a loss by including it on your tax return, which means you can offset it against taxable gains in future tax years. 

If your gains exceed the annual exempt amount (and any other allowances or reliefs available) you will need to pay CGT on those gains, via your tax return or HMRC online services. From the 2024/25 tax year onwards, the self-assessment tax return includes a dedicated section for reporting cryptoasset gains and losses on the capital gains SA108 supplementary pages.  

If you realise that you have not reported crypto gains correctly in earlier years, HMRC also offers a voluntary disclosure facility. This allows you to come forward and declare any unpaid tax relating to prior periods, helping you to bring your tax affairs up to date. Speak to your accountant with cryptoassets experience before making a disclosure to ensure you have the most up to date advice. 

What records do I need to keep? 

HMRC expects you to keep your own records for each of your cryptoasset transactions. You should not rely on records kept by the cryptoasset exchange because they may only be kept for a short period and may not be structured for UK users.  

You need to record details including: 

• the transaction type and date  
• the type of token acquired or disposed of 
• the number of units bought or sold, and 
• the transaction value.  

The full list of what you should record can be found here.  

What are some common mistakes to avoid? 

It is easy to overlook transactions or assume they don’t really matter. However, if a transaction gives rise to taxable income or a capital gain, it should be recorded and reported to HMRC. Keeping accurate records of all your crypto activity is essential.  

If you receive cryptoassets for free, for example through an airdrop, these may also need to be reported. 

You should also remember to claim your losses. Cryptoassets can be volatile, and making a loss is never the aim, but you may be able to use losses to reduce your overall tax liability. 

How can TaxAssist Accountants help? 

Understanding your tax position on your cryptoasset investments can feel daunting.  

At TaxAssist Accountants, we can help you navigate the complex rules, ensure you meet your reporting obligations and provide you with peace of mind that you are compliant. Call us on 01582 945 622 or use our online contact form. 

Last updated: 4th March 2026