Consider the tax implications if you hold or use cryptoassets

Selling, exchanging, gifting or shopping with cryptoassets will result in a capital gain or loss on each transaction.

If your total capital gains, including from cryptoassets, exceed £3,000 pa or total sales/exchanges/shopping etc exceeds £50,000 pa then you have to report cryptoasset gains and losses on your Tax Return.

From 1 January 2026, individuals buying cryptoassets must share their cryptoasset account details with HMRC or face penalties. HMRC has concern about the high levels of non-tax compliance among cryptoassets holders. HMRC hopes to collect at least £300m in extra capital gains tax over the next five years.

The tax consequences of holding and using cryptoassets, like Bitcoin or Ethereum, are widely misunderstood.

As the cryptoasset market is growing, so is HMRC’s interest in it, and they are looking for capital gains tax on your profits.  The Tax Return now prompts you to report cryptoasset transactions separately to other capital gains.

HMRC automatically receives data from major cryptoasset platforms so be sure to consider the tax implications for your Tax Return. As HMRC will know about your cryptoasset transactions, the rules will make it harder for investors in cryptoasset to hide their untaxed gains.

Capital gains tax reporting

The vast majority of people buying and selling cryptoassets are treated in the same way as if they were buying and selling any other capital asset, e.g. shares, and may need to declare their gains and losses on a Tax Return.

Are you making capital gains?

Do not think that you only need to consider capital gains tax and Tax Return reporting when you withdraw cryptoasset from your digital wallet. Capital gains arise whenever you make any ‘disposal’ of cryptoassets.

Disposals are wide-ranging and includes:

• selling the cryptoassets

• swapping one type of cryptoasset for another

• using cryptoassets to pay for goods or services; and

• gifting (other than to your spouse/civil partner).

If you used £500 worth of Bitcoins to buy something, e.g. a new computer, then you have disposed on some of your Bitcoins. If you bought those same Bitcoins at £200 then you have made a capital gains of £300. 

If your total capital gains, including from cryptoassets, exceed £3,000 pa then you have a reportable capital gains tax liability to declare and to pay tax on.  It does not take too much to generate £3,000 of gains a year, especially if you sell / exchange other cryptoassets or trade in shares generally.

Keeping records

Cryptoasset exchanges general have downloadable transaction logs, though you should keep your own record of:

• dates of transactions

• £ value of each transaction

• amount and type of cryptoassets bought or sold

• transaction fees.

Some interesting facts

• 7 million people in the UK hold cryptoassets

• 19% of those who hold cryptoassets are worth more than £5,000

• 52% of people says that their cryptoassets have increased in value

More information

You may wish to also read the section of our website on ‘Cryptocurrency/cryptoassets’ within the ‘Completing your Self Assessment Tax Return’ page.

This webpage refers you to a more detailed blog article on our website and to HMRC guidance.