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Exchange fees

HMRC has also set out which exchange fees can and cannot be deducted from gains as an allowable incidental cost. Below is a list of common fees charged by exchanges and whether or not they are an allowable incidental cost:
Situation in which an exchange fee may be incurred
Tax Treatment of fee for CGT purposes
GBP for FX - Exchange (swap) sterling for a fiat currency other than sterling (ie USD or EUR)
Not allowable – not an allowable incidental cost of acquiring or disposing of a cryptoasset token
FX for GBP - Exchange (swap) fiat currency other than sterling (ie USD or EUR) for sterling
Not allowable – not an allowable incidental cost of acquiring or disposing of a cryptoasset token
Deposit GBP - Deposit sterling with an exchange
Not allowable - Sterling isn’t an asset for CGT purposes so it is not an allowable cost
Deposit FX - Deposit fiat currency other than sterling (ie USD or EUR) with an exchange
Not allowable - the depositor retains beneficial ownership of the fiat currency (ie USD), so there’s no acquisition or disposal that the costs can be attributed to
Trade token swap - Exchange (swap) token A for token B
Allowable - the fee paid is in relation to the whole of the transaction, that is for a disposal of one asset and the acquisition of another asset. This means that the fee is attributable to both assets. HMRC’s view is that this fee would be allowable as a deduction in computing the disposal in respect of token A, and that it would be allowable as a deduction in computing the eventual disposal of token B. However, a sum may be allowed as a deduction only once in computing a disposal. Therefore the cost should be apportioned between both assets (Token A and Token B) on a just and reasonable basis. HMRC will accept apportioning this fee equally between the assets disposed of and the assets acquired (that is a 50/50 split), or a different approach will be considered if it is just and reasonable.
Trade for GBP - Dispose of tokens for sterling
Allowable - this is as an incidental cost of disposing of the tokens
Trade for FX - Dispose of tokens for fiat currency other than sterling (ie USD or EUR)
Allowable - this is as an incidental cost of disposing of the tokens
Withdrawal of GBP - Withdraw sterling from the exchange
Not allowable - Sterling isn’t an asset for CGT purposes so not an allowable cost
Withdrawal of FX - withdraw fiat currency other than sterling (ie USD or EUR) from the exchange
Not allowable - the withdrawer retains beneficial ownership of the fiat currency other than sterling so there’s no acquisition or disposal that the costs can be attributed to