HMRC has been clear since 2019: cryptocurrency is property, not currency. Every disposal \u2014 selling, swapping, or spending crypto \u2014 is a potential Capital Gains Tax event. And yes, HMRC is watching. They’ve issued “nudge letters” to crypto holders and receive data directly from major exchanges.<\/p>\n
Under HMRC’s cryptoasset guidance<\/a>, a disposal happens when you:<\/p>\n Sell<\/strong> crypto for fiat currency (GBP, USD, EUR). Simply buying crypto with fiat, or transferring between your own wallets, is not<\/strong> a disposal.<\/p>\n HMRC applies the same share matching rules<\/a> to crypto as to shares: same-day rule first, then the 30-day bed and breakfast rule, then Section 104 pool. Each type of token (Bitcoin, Ethereum, etc.) has its own pool \u2014 just like each company’s shares have a separate pool.<\/p>\n This is explicitly stated in HMRC’s Cryptoassets Manual at CRYPTO22200<\/a>.<\/p>\n The 30-day rule<\/a> is particularly relevant for crypto traders because the markets run 24\/7. If you sell Bitcoin on Monday and buy it back on Saturday, the 30-day rule applies.<\/p>\n Staking rewards and airdrops are generally treated as income<\/strong> (not capital gains) at the market value when received. They enter your pool at that value. When you later sell, any gain from the income-entry price is subject to CGT.<\/p>\n DeFi transactions (lending, liquidity provision, yield farming) are still a grey area. HMRC’s guidance is evolving, but the principle is: if you dispose of tokens, there’s a CGT event. If you receive tokens as income, there’s an income tax event. The DeFi section of the Cryptoassets Manual<\/a> has the latest guidance.<\/p>\n If your exchange reports values in USD (as most do), you need to convert to GBP using HMRC monthly exchange rates<\/a> \u2014 the same as for US share trades.<\/p>\n Crypto-to-crypto swaps are trickier. You need the GBP value of both tokens at the time of the swap. Most people use the exchange’s reported USD value and convert to GBP with the HMRC monthly rate.<\/p>\n Crypto gains use the same \u00a33,000 annual exemption as shares. They’re combined \u2014 \u00a32,000 of share gains plus \u00a32,000 of crypto gains equals \u00a34,000 total, with \u00a33,000 exempt and \u00a31,000 taxable. You don’t get a separate allowance for crypto.<\/p>\n Report crypto gains in the “Other property, assets and gains” section of SA108<\/a> (Boxes 14-22). The reporting thresholds<\/a> are the same \u2014 report if proceeds exceed \u00a312,000 or gains exceed \u00a33,000.<\/p>\n HMRC isn’t bluffing about crypto compliance. They’ve used data sharing agreements<\/a> with major exchanges (Coinbase, Binance, Kraken) to identify UK users. They’ve issued thousands of “nudge letters” to taxpayers they believe haven’t declared crypto gains. The BBC has reported on HMRC’s crypto enforcement drive<\/a>, and penalties for non-disclosure are severe.<\/p>\n If you’ve been trading crypto and haven’t reported gains in previous years, consider making a voluntary disclosure to HMRC<\/a>. Penalties are lower for voluntary disclosure than for being caught.<\/p>\n TaxBull<\/a> is currently focused on share and option CGT from broker CSVs. For dedicated crypto tax calculation, specialist tools like Koinly<\/a> or CoinTracker<\/a> can handle the complexity of multiple exchanges and DeFi protocols. Your crypto gains and share gains then combine on your SA108 for the total CGT picture.<\/p>\n
\nSwap<\/strong> one crypto for another (e.g., BTC to ETH \u2014 both legs are disposals).
\nSpend<\/strong> crypto to buy goods or services.
\nGift<\/strong> crypto to someone (at market value, unless to your spouse).<\/p>\nShare pooling applies to crypto<\/h2>\n
DeFi, staking, and airdrops<\/h2>\n
Exchange rates for crypto<\/h2>\n
The \u00a33,000 exemption applies<\/h2>\n
HMRC enforcement<\/h2>\n
TaxBull and crypto<\/h2>\n