Crypto Tax Rate UK: Capital Gains Explained (2024 Guide)

Understanding Crypto Capital Gains Tax in the UK

Cryptocurrency investments can generate significant returns, but they also trigger tax obligations in the UK. Her Majesty’s Revenue and Customs (HMRC) treats crypto assets as property, meaning profits from their disposal are subject to Capital Gains Tax (CGT). This guide breaks down the crypto tax rate UK capital gains rules, helping you navigate reporting requirements legally and efficiently.

What is Capital Gains Tax on Cryptocurrency?

CGT applies when you “dispose” of crypto assets and make a profit exceeding your annual exemption. Disposal includes:

• Selling crypto for fiat currency (e.g., GBP)
• Swapping one cryptocurrency for another
• Using crypto to purchase goods/services
• Gifting crypto (except to spouses/civil partners)

Note: Simply holding crypto or transferring between your own wallets isn’t taxable.

UK Crypto Capital Gains Tax Rates for 2024/2025

Your crypto tax rate depends on your total taxable income:

• Basic-rate taxpayers: 10% on crypto gains
• Higher/additional-rate taxpayers: 20% on crypto gains

Your tax band is determined by combining your salary, other income, and crypto gains. The annual CGT exemption for 2024/25 is £3,000 – meaning the first £3,000 of gains are tax-free.

How to Calculate Your Crypto Capital Gains

Follow these steps to compute taxable gains:

1. Identify disposal events: List all taxable transactions during the tax year (6 April – 5 April)
2. Calculate gain per transaction: Sale price minus original cost (including fees)
3. Apply the “same-day” and “30-day” bed and breakfast rules to prevent wash sales
4. Deduct allowable losses: Offset losses against gains in the same tax year
5. Subtract your annual exemption: £3,000 for 2024/25

Example: You sell Bitcoin with a £15,000 profit. After deducting your £3,000 exemption, taxable gain = £12,000. If you’re a higher-rate taxpayer, tax due = £12,000 × 20% = £2,400.

Reporting Crypto Gains to HMRC

You must declare gains above £3,000 via Self Assessment:

• Register for Self Assessment by 5 October following the tax year
• File your tax return by 31 January (e.g., 2024/25 return due by 31 Jan 2026)
• Use the “Capital Gains Summary” pages (SA108)
• Pay owed taxes by 31 January deadline

Tip: Use HMRC-compatible crypto tax software (e.g., Koinly, CoinTracking) to automate calculations.

4 Strategies to Reduce Crypto Tax Legally

1. Utilise your annual exemption: Spread disposals across tax years
2. Offset losses strategically: Sell underperforming assets to counter gains
3. Transfer assets to a spouse/civil partner: No CGT on transfers; use their exemption
4. Hold in an ISA/SIPP: Some platforms offer crypto ISAs (tax-free gains)

Frequently Asked Questions (FAQ)

Do I pay tax if I transfer crypto between exchanges?

No – transfers between wallets/exchanges you own aren’t disposals. Tax applies only when changing beneficial ownership.

Is staking income taxable?

Yes – staking rewards count as miscellaneous income, taxed at your income tax rate (20%-45%). When you later sell staked coins, CGT applies on any gain.

What if I lost crypto in a scam or hack?

Report this as a capital loss. You can offset the loss against gains in the same tax year or carry it forward indefinitely.

How does HMRC track crypto transactions?

HMRC uses blockchain analytics, data-sharing with exchanges (under Common Reporting Standard), and voluntary disclosures. Non-compliance risks penalties up to 100% of owed tax.

Are NFT sales subject to CGT?

Yes – NFTs are treated like other crypto assets. Profits from sales face standard CGT rates after your annual exemption.

Can I use “crypto-to-crypto” trades from years ago?

Yes – you must calculate gains/losses using historical exchange rates. HMRC requires records for at least 6 years after disposal.

Disclaimer: This guide provides general information, not personalized tax advice. Consult a qualified accountant for your specific situation.