How to declare cryptocurrency taxes in the UK?

£3,000 is the individual annual capital gains tax exemption.

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 it to calculate the profit and loss of coins separately may miss the currency conversion and consumption occurring 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 his 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 personal 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 also depends on the applicable income tax exemption. When receiving a reward, keep the pound sterling valuation at that time. Later, when selling, the capital gain should be calculated separately. The portion already taxed as income tax will not be subject to capital gains tax again. In actual accounting, "crypto income" and "profit or loss from selling crypto" can be placed in different columns, and the two valuations 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 need to pay taxes, but you may still need to fill out forms

£3,000 refers to gains; £50,000 refers to the total amount of proceeds from disposal, and the two measure different aspects.

According to HMRC's capital gains tax guidance, individuals who have registered for Self Assessment must report the total proceeds from disposal of relevant assets in the 2025/26 tax year if it exceeds £50,000, even if the gain is below the allowance. It cannot be interpreted as "no tax if the transaction is under £50,000": whether there is tax or not should be determined separately by considering the gain, allowable losses and the allowance. Both should be checked after aggregating the relevant assets, not just looking at one transaction account or the amount transferred to the bank.

When verifying, list "Total amount of disposal for 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 by splitting?

There is a specific detail when filling out the form: For the HMRC 2025/26 tax year SA108 form, there is a separate section for Cryptoassets (cryptocurrency assets). Fill in the gain before deducting losses in row 13.4, and fill in the loss for the year in row 13.5; only one net profit number for the whole year cannot complete these two rows. In the previous rows 13.2 and 13.3, the proceeds from disposal and deductible costs are required respectively, including the purchase cost. When preparing the supporting documents, 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 tax incentives should be filled into the corresponding sections according to the income category. 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: 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's not advisable to directly copy the withdrawal difference. Now, all platform and wallet records can be exported, uniformly converted into the value of pounds at the time of the transaction, and then checked item by item against the report to find any omissions. 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 the data, it is also necessary to check whether transfers from your own wallet are identified as transactions, and whether rewards are missed in the income column. Being able to trace each amount makes 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 Guidance for Selling Cryptocurrency", "Capital Gains Summary SA108 and Instructions", "Self-Assessment Tax Return Deadlines". Transaction classification and income treatment refer to HMRC "Cryptoassets Manual" and Coin Receipt 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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