Do you need to report cryptoasset gains or income to HMRC?
You may need to report cryptoasset activity to HMRC when you dispose of tokens or receive them as income. The answer depends on what happened, how the tokens were received and the rules for the relevant tax year.
This is a general guide, not personal tax advice. HMRC’s Cryptoassets Manual and GOV.UK guidance should be checked for current rules. A tax adviser can help with circumstances that do not fit the basic examples.
What counts as disposing of cryptoassets?
HMRC says a disposal can include:
- selling tokens for pounds or another fiat currency
- exchanging one type of cryptoasset for another
- using tokens to pay for goods or services
- giving tokens to another person, subject to the rules for gifts to a spouse, civil partner or charity
A disposal can therefore happen without money being paid into a bank account. Swapping one token for another may still require records and a gain calculation.
How are gains considered?
A gain is normally based on the difference between what you paid for an asset and what you received when you disposed of it, after relevant allowable costs. HMRC’s rules include special provisions for transactions made soon after acquisition and for pooled costs, so a simple “buy price minus sell price” calculation may not be enough.
Allowable costs can include certain transaction fees and other costs connected with the transaction. The rules should be checked against the current HMRC guidance rather than copied from an old spreadsheet or online calculator.
If your total gains from relevant disposals exceed the Capital Gains Tax annual exempt amount for the tax year, you may need to report the gain and pay tax. The allowance and tax rates can change, so this article should not contain a permanent figure without a dated update.
Can cryptoassets be treated as income?
Some cryptoassets are received rather than bought and sold. HMRC says other taxes may apply when cryptoassets are received. The treatment depends on why they were received, such as employment, a business activity or another form of income.
The same token can therefore raise different tax questions at different points. Receiving it and later disposing of it are not automatically one event for tax purposes. Keep the records for both stages.
What records should you keep?
Keep a record of each transaction, including:
- date and time
- type and amount of token
- value in pounds at the relevant time
- what happened: purchase, sale, exchange, gift or receipt
- fees and other transaction costs
- wallet and exchange records
- the identity of the counterparty where available
Do not rely on a single exchange statement. Check that exports cover transfers between wallets, token swaps and assets held on more than one platform.
What should you do next?
Start with HMRC’s current cryptoasset guidance and organise the records before attempting a return. If you have staking, lending, mining, employment income, a business, gifts, losses or transactions across several platforms, seek qualified advice rather than assuming that a basic disposal example covers everything.
The rules and tax-year thresholds can change. Check the official page’s update date before relying on any figure in this article.
For background, see our explainers on what a cryptoasset is, what tokenisation means and crypto scam terminology.