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 ‘financial trader’ 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 “dispose” of cryptoassets.
HMRC guidance confirms that disposals (taxable events) include: 
​Selling cryptoassets for fiat money (e.g. GBP, USD, EUR).
​Exchanging cryptoassets for a different cryptoasset (e.g. exchanging Bitcoin to Ripple).
​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.
​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.​
​Moving tokens between wallets owned by the same person does not result in a taxable disposal.
Purchasing cryptoassets is not taxable.
   
Calculating the Capital Gains Position
Disposal proceeds
Disposals to Connected Parties
Allowable costs for CGT
Capital Loss Claims

Court Cases involving Financial Traders

Calculating the Capital Gains Position

Last modified 3d ago

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Contents

Investing in cryptoassets

Taxable events