Capital Gains Tax

Investing in cryptoassets

HMRC expect most individuals with cryptoasset activity to be treated as an investor (for capital appreciation), subject to the capital gains tax regime. Where this is the case, they are liable for capital gains tax on the disposal of cryptoassets.
In exceptional circumstances will a taxpayer be treated as a โ€˜financial traderโ€™ in cryptoassets. In which case these disposals are treated as business trading income, subject to income tax and national insurance.

Taxable events

Individuals investing in cryptoassets must calculate the capital gain or capital loss they have made whenever they โ€œdisposeโ€ of cryptoassets.
HMRC guidance confirms that disposals (taxable events) include:
โ€‹Selling cryptoassets for fiat money (e.g. GBP, USD, EUR).
โ€‹Exchanging cryptoassets for a different cryptoasset (e.g. exchanging Bitcoin to Ripple).
โ€‹Using cryptoassets to pay for goods or services (e.g. paying fees on crypto trades, paying fees on crypto withdrawals and deposits of cryptoassets, buying a Starbucks Coffee or paying for a software subscription.
โ€‹Giving away cryptoassets to another person is deemed to be a disposal at market value unless to a spouse/civil partner or a qualifying charitable/CASC donation.โ€‹
โ€‹Moving tokens between wallets owned by the same person does not result in a taxable disposal.
Purchasing cryptoassets is not taxable.

Last modified 3d ago