How to declare cryptocurrency taxes in the UK?

£3,000, the individual annual capital gains tax allowance.

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 statements are suitable for verifying the inflow and outflow of fiat currency. Using them alone to calculate the profit and loss of coins will miss the coin exchange and consumption occurring within the account.

HMRC's "Cryptoassets Manual" CRYPTO22100 classifies exchanging one type of cryptocurrency for another, or using cryptocurrency to purchase goods or services as a disposal (disposal); even if the pounds have not been deposited into a bank, the profit or loss from this disposal should be calculated. Conversely, if the same person moves the cryptocurrency 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, reward, transfer from own wallet," and outgoing and incoming transactions can be matched to avoid double-counting the same asset movement. The transaction date, quantity, and the value in pounds at that time should correspond back to the original records.

Receiving cryptocurrency may also involve income tax. The HMRC guidance on receiving cryptocurrency categorizes non-commercial mining and staking rewards as other taxable income; if employers pay salaries in cryptocurrency, it may also involve national insurance contributions.

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

No need to pay taxes, but you 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 guidance, individuals who have registered for Self Assessment (Self-Assessment) must report the total proceeds from the disposal of relevant assets in the 2025/26 tax year if it exceeds £50,000, even if the gain is below the exemption threshold. It cannot be interpreted as "no tax if the transaction is under £50,000": whether tax is payable should be determined separately based on the gain, allowable losses, and the exemption threshold. Both should be cross-checked after aggregating the relevant assets, not just by looking at one transaction account or the amount transferred to the bank.

When reconciling, list "Total amount of disposal for the year" and "Gains 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: For the HMRC 2025/26 tax year SA108 form, a separate "Cryptoassets (Cryptocurrency)" section has been set up. 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 figure for the whole year can be placed, 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 working papers, list them according to these criteria, and when declaring online, check each item one by one; capital gains should be placed in the cryptoassets section, and any income-related rewards from income tax should be filled into the corresponding sections. Original transaction records and calculation details should be retained for review purposes.

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

My judgment is that people with 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 is not advisable to directly copy the withdrawal difference. Now, all platform and wallet records can be exported, converted into the value in pounds at the time of transaction, and then checked item by item against the report to find any missing items. Transactions lacking purchase records should be marked for verification of cost, and blank entries should not be directly submitted as zero cost. After software summary, it is also necessary to check whether transfers from personal wallets 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 article 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 notes", "Self-assessment tax return deadlines". Transaction classification and income treatment refer to HMRC "Cryptoassets Manual" and receiving coins tax 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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