When do you need to pay CGT? 

You may owe Capital Gains Tax (CGT) when you carry out the following crypto transactions. 

• Selling tokens for cash 
• Swapping one crypto for another 
• Using crypto to pay for goods or services 
• Gifting tokens (except to a spouse or civil partner) 

If you receive crypto as payment for work or services, it is subject to Income Tax instead. 

How to calculate your taxable gains/losses 

To determine if you owe CGT, you must calculate your gain for each transaction. The gain is the difference between what you paid for the crypto currency vs what you sold it for. If the transaction involves a connected person or a non-cash exchange, market value is used instead. 

Certain costs can be deducted from your gain, including: 

• Transaction fees 
• Costs of finding a buyer or seller 
• Fees for drawing up contracts 
• Costs of valuing tokens for tax purposes 

However, mining-related costs, such as electricity and equipment, cannot be deducted. 

Pooling and the 30-Day rule 

Cryptoassets follow the same pooling rules as shares in the UK. Instead of tracking individual transactions, you group tokens of the same type into a pool and calculate an average cost. 

If you buy and sell the same type of token within 30 days, special rules apply, similar to share transactions. 

Reporting and paying tax 

If your total taxable gains exceed the annual CGT allowance, which in the 2023/24 tax year was £6,000 and in 2024/25, is lowering to £3,000, you must report them to HMRC on your self-assessment tax return. 

All reports must be in pound sterling. If your crypto is valued in a foreign currency, convert it using the exchange rate on the relevant transaction date. 

If you failed to report tax in previous years, you can disclose unpaid tax through HMRC’s Cryptoasset Disclosure Service. 

Keeping records 

HMRC requires you to maintain detailed records of all crypto transactions, including: 

• Type and quantity of tokens bought and sold 
• Dates of transactions 
• Value in GBP at disposal 
• Records of fees and costs deducted 
• Bank statements and wallet addresses 

Some crypto exchanges provide transaction reports, but these are not official tax calculations. You must track your pooled costs separately for accurate reporting. 

Future changes 

Cryptocurrency taxation in the UK is evolving. While current rules apply existing tax principles, whether this currency meets the definition of money in the future remains to be seen.

Keeping accurate records and staying informed about HMRC’s latest guidance will help ensure compliance and prevent unexpected tax bills.

If you need assistance with reporting CGT or how to retrieve your key documents for calculating gains and losses, do reach out! 

Useful links 

https://youtu.be/PJtKRHGV4iE