How to declare cryptocurrency taxes in the UK?

£3,000, the annual capital gains tax-free allowance for individuals.

The standard personal allowance for the 2025/26 tax year published by HMRC is £3,000, and taxable gains on assets such as stocks are also calculated together. This tax year covers from April 6, 2025, to April 5, 2026. Holders of ILR (UK permanent residency) or UK visas still need to confirm their tax residency status separately. The following discussion focuses on individual investments of UK tax residents who are entitled to the standard personal allowance; business operations and special cross-border reliefs require separate calculations.

What is the difference between the withdrawal account and the transaction account?

Bank transaction records are suitable for verifying the inflow and outflow of fiat currency. Using them to calculate the profit and loss of coins separately may miss the coin exchanges and consumption that occur within the account.

HMRC's "Cryptoassets Manual" CRYPTO22100 classifies exchanging for another token, or using tokens to purchase goods or services as a disposal (disposal); even if the pounds have not entered the bank, the profit or loss from this disposal should be calculated. Conversely, if the same person moves the tokens to another wallet of their own, and the beneficial ownership remains unchanged, the transfer itself does not constitute a disposal. When organizing, each transaction can be labeled as "buy, sell, exchange tokens, reward, transfer from own wallet," and outgoing and incoming transactions can be matched to avoid the same asset movement being counted twice. The transaction date, quantity, and the pound value at that time should correspond back to the original records.

Receiving cryptocurrency may also involve income tax. HMRC's guidance on receiving cryptocurrency classifies non-commercial mining and staking rewards as other taxable income; employers paying salaries in cryptocurrency may also involve national insurance contributions.

This type of income cannot directly apply the £3,000 capital gains tax exemption. The actual tax liability still depends on the applicable income tax exemption. When receiving a reward, keep the pound value at that time. When selling later, the capital gain should be calculated separately. The portion that has already been taxed as income tax will not be subject to capital gains tax again. In actual accounting, "coin received income" and "profit or loss from selling coins" can be placed in different columns, and the two valuation bases should be retained. This way, the source of each amount can be explained, and the total gain currently displayed in the account is less likely to be mistakenly regarded as the annual taxable amount.

No tax payment required, but may still need to fill out forms

£3,000 refers to gains; the £50,000 reporting line refers to the total proceeds from disposal, and the two measure different contents.

According to HMRC's capital gains tax guidelines, individuals who have registered for Self Assessment (self-assessment) must report the total proceeds from the disposal of relevant assets in the tax return if it exceeds £50,000 in the 2025/26 tax year, even if the gain is below the allowance. It cannot be interpreted as "exempt if the transaction is less than £50,000": whether there is tax payable should be determined separately based on the gain, allowable losses, and the allowance. Both should be checked by aggregating the relevant assets, not just looking at one transaction account or the amount transferred to the bank.

When verifying, list "Total amount obtained from disposal throughout the year" and "Gain after deducting deductible losses" each on a separate line, which is suitable for people who frequently exchange currencies to refer to.

Fill in the net profit column, or fill it out separately?

There is a specific detail when filling in the form: The HMRC SA108 form for the 2025/26 tax year has a separate section for Cryptoassets (cryptographic assets). Fill in the gain before deducting losses in box 13.4, and fill in the loss for the year in box 13.5; only one net profit number for the whole year can be filled, which cannot complete these two boxes. In the previous boxes 13.2 and 13.3, the proceeds from disposal and deductible costs are separately required, including the purchase cost. When preparing the supporting documents, they should be categorized according to these criteria, and each item should be checked one by one when submitting online. Capital gains should be placed in the cryptoassets section, and if there is a reward belonging to income tax, it should be filled into the corresponding section according to the income category. Original transaction records and detailed calculations should be retained for review.

Those who need to submit their self-assessment tax return for the first time for the 2025/26 tax year should inform HMRC by 5 October 2026; the usual deadline for online submission and payment is 31 January 2027.

My judgment is: those who have currency exchange or reward records should choose the complete transaction ledger as the basis for declaration. Bank statements should be used to verify funds, and it's not advisable to directly copy the withdrawal difference. Now, it's possible to export all platform and wallet records, convert them uniformly into the value in pounds at the time of the transaction, and then check for omissions item by item against the report. Transactions lacking purchase records should be marked for verification of cost, and it's not acceptable to take blank spaces as zero cost and submit directly. After the software aggregates, it's also necessary to check whether transfers from one's own wallet are identified as transactions, and whether rewards are missed in the income column. Being able to trace each amount will make it easier to confirm whether the tax form is filled correctly.

This document is for reference only. For specific issues, please consult a licensed attorney.

[Data source] HMRC "Tax on the disposal of cryptoassets guidance", "Capital Gains Summary SA108 and instructions", "Self-assessment filing deadlines". The transaction classification and income treatment refer to HMRC "Cryptoassets Manual" and the receiving coins tax reporting guidance.

"You must keep your own records of your transactions."
HMRC Cryptocurrency Tax Guide: You must keep your own transaction records.

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