Capital Gains Tax & Cryptocurrency — United Kingdom

Reduced from £6,000 in 2023/24, £12,300 in 2022/23. Major reduction significantly increases tax for active investors. Use it or lose it annually.

18% on most gains for basic rate taxpayers. 10% on qualifying business disposals (Business Asset Disposal Relief, formerly Entrepreneurs' Relief). Check which tax band gain falls into.

24% on gains for higher/additional rate taxpayers. 20% on qualifying business disposals. Residential property CGT higher (18%/24% unchanged). Gains added to income to determine rate.

Residential property CGT must be reported and paid within 60 days of completion. Other assets reported in Self Assessment by January 31. Different deadlines critical.

HMRC treats crypto as property, not currency. Each disposal (selling, swapping, spending, gifting except to spouse) creates CGT event. Must track every transaction.

Basic rate taxpayers pay 18%, higher/additional rate pay 24%. Rates depend on total income plus gains. £3,000 annual allowance applies. Losses can offset gains indefinitely.

Mining rewards, staking, airdrops, DeFi yield, employment payments in crypto taxed as income at 20%/40%/45% plus NICs if employment. Valued at receipt in GBP.

Same-day rule first, then bed & breakfast rule (30 days), then Section 104 pooling (average cost). Cannot choose method. HMRC rules prevent tax manipulation.

Cryptoasset Reporting Framework starts January 1, 2026. UK crypto exchanges must collect and report user data, transactions to HMRC. International data sharing with other jurisdictions.

HMRC receiving much richer dataset. Will compare CARF data with Self Assessment returns. Expect 'nudge letters' to non-declarers. Historic undeclared gains can use Cryptoasset Disclosure Service for lower penalties.

Keep records of all crypto transactions: dates, values in GBP, transaction fees, wallet addresses. Many transactions across multiple platforms makes record-keeping complex. Crypto tax software recommended.