Tax

You may have to pay Capital Gains Tax when you dispose of cryptoasset tokens, also called cryptocurrency, and make a gain. A disposal includes a sale, a swap for a different type, paying for goods or services, and a gift. A gift to a spouse, a civil partner or a charity is not included.

The tax year runs from 6 Apr to 5 Apr. If the total gain for the year is above the tax-free allowance, you report it and pay the tax. The allowance amount is a link on the guide, and it is not copied here. The gain is normally the sale price minus what you paid. Sometimes you use market value instead, for example between connected persons. If you have already paid Income Tax on part of the value, Capital Gains Tax applies only to any gain after you received the tokens.

Group each type of token into a pool, and use a pooled cost. Do not pool tokens of the same type that you buy on the day you sell them, or within 30 days of the sale. Those cases follow the same rules as shares, in helpsheet HS284. You can deduct transaction fees, the cost of advertising for a buyer or a seller, drawing up a contract, a valuation, and a share of the pooled costs. You cannot deduct costs already deducted against Income Tax profits, or mining costs such as equipment and electricity.

Some exchanges give you a report of transactions. That can help. It is not a tax calculation, and it does not track the pooled cost. Keep your own records, in pounds. Report and pay on a Self Assessment return, in the cryptoasset section, on returns for the 2024 to 2025 tax year onwards, or use the Capital Gains Tax real time service. Unpaid tax from earlier years goes through the Cryptoasset Disclosure Service.

Tokens you receive from employment, mining, staking or lending count as income. That includes income from decentralised finance. Buying tokens is not taxed at the purchase. You may be taxed when you sell them.

If the mining, staking or lending is not a trade, the tokens are other taxable income. There is an allowance of up to £1,000 a year for trading and miscellaneous income, and crypto income counts towards it. If your total miscellaneous income from all sources is between £1,000 and £2,500, tell HMRC. If it is over £2,500, register for Self Assessment.

Tokens from an employer count as money's worth. Income Tax and National Insurance apply. Exchange tokens such as bitcoin are readily convertible, so a UK employer must operate PAYE. If the tokens are not readily convertible and the employer did not operate PAYE, you pay the Income Tax yourself, on a Self Assessment return, in pounds. A later disposal is Capital Gains Tax on the increase since you received them.

Tax is reported to HM Revenue & Customs: Self Assessment, the Capital Gains Tax real time service, the Cryptoasset Disclosure Service for earlier unpaid years, or a contact about miscellaneous income.

The FCA cannot help with an HMRC or tax fraud. Contact Report Fraud on 0300 123 2040, or the website it links. In Scotland, report to Police Scotland on 101, or contact Advice Direct Scotland on 0808 164 6000. A suspicious email, text or call that claims to be from HMRC is reported through the HMRC link on the FCA's page. The FCA also cannot get the money back for you.