# 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |