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Recap HomeCrypto Tax Guide (Lite)HMRC Cryptoassets Manual
  • A Technical Guide to Cryptocurrency Tax for UK Individuals
    • What are Cryptoassets?
    • Who are Recap?
  • CRYPTOCURRENCY TAX
    • Do I Need to Pay Tax on my Cryptoassets?
    • Which Taxes Apply?
      • Capital Gains Tax (CGT)
      • Income tax
      • VAT
      • Inheritance tax
      • Stamp Duty
    • How Much Tax Will I Pay?
    • New HMRC DeFi Guidance
      • Overview of HMRC guidance
      • 1️⃣Is the Reward Income or Capital?
      • 2️⃣Is Beneficial Ownership (BO) transferred?
      • 3️⃣Consider the Tax Treatment
        • Staker/Lender/Collateral Provider
          • Income Rewards
            • BO transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Income Reward
              • Example 1A
              • Example 2A
            • BO not transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Income Reward
              • Example 1B
              • Example 2B
          • Capital Rewards
            • BO transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Capital Reward
              • Example 1C
              • Example 2C
            • BO not transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Capital Reward
              • Example 1D
              • Example 2D
        • Borrower
    • Investor or Trader?
      • Badges of Trade Limitations
      • HMRC Approach
      • Court Cases involving Financial Traders
    • Capital Gains Tax
      • Calculating the Capital Gains Position
      • Disposal proceeds
      • Disposals to Connected Parties
      • Allowable costs for CGT
        • Exchange fees
        • Forks - affect on allowable costs
      • Capital Loss Claims
    • Income Tax
      • Financial trading income
      • Miscellaneous Income
      • Employment income
    • Fair Market Valuation
  • TRANSACTION TYPES
    • 💷Selling Crypto for Fiat
    • 🔄Trading Crypto to Crypto
    • 🛍️Purchases using Crypto
    • 🎁Gifts
    • 💍Spouse Transfers
    • 🎗️Gifts to Charity, CASCs & Bodies for a National Purpose
    • 🎈Airdrops
    • 🤝Staking
    • 💸Transfers
    • 🍴Forks
    • ⛏️Mining
    • 👛Employment income
      • UK Employer
      • Overseas employer
      • National Minimum Wage (NMW)
    • 🚨Lost & Stolen Crypto
    • 🎲Gambling
    • 💧Liquidity Pools
      • Example - Liquidity pool
    • ⬆️Token Upgrades/Swaps
    • 🔮Cryptoasset derivatives (CFDs, Futures and Margin Trading)
    • 💼Crypto Loans
    • 🔄REPOS
    • 🪞Reflections Rewards
    • 👥Referral Income
    • 💳Cashback
    • 🎨NFTs (Non Fungible Tokens)
    • 🎮NFTs earned playing games
  • Record Keeping
  • Filing Your Self-Assessment
    • How to Register for Self-Assessment
    • How to Fill In the Tax Return
    • Submitting the Tax Return and Paying the Tax
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  • What disposal proceeds are used?
  • Disposal proceeds for different types of disposals

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  1. CRYPTOCURRENCY TAX
  2. Capital Gains Tax

Disposal proceeds

PreviousCalculating the Capital Gains PositionNextDisposals to Connected Parties

Last updated 3 years ago

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What disposal proceeds are used?

It is vital to identify the correct disposal proceeds in sterling for each disposal made and it is not always as straightforward as you might think.

Even where two parties in a transaction are not ‘connected’, the deemed proceeds will be market value where there has been a gift or where the recipient has paid less than market value. The market value of the cryptoasset at the date of disposal needs to replace the actual proceeds received by the seller in the capital gains calculation.

Disposals to a spouse or civil partners are usually treated as made with no gain and no loss, but often still need to be reported on the Tax Return. The disposal proceeds are deemed to equal the allowable costs. There are however certain restrictions, including when a couple has separated, detailed guidance should be considered and can be found at the following link...

💝 Disposals to a charity, CASC or body for a national purpose

Relief from capital gains tax is given in respect of disposals of cryptoassets to a UK, EU or EEA charity, a community amateur sports club (CASC), or to a body for a National Purpose (e.g. The British Museum).

When the recipient pays no more than the CGT allowable costs for the cryptoasset and it is not a tainted donation, the disposal is treated as being made for no gain and no loss. Therefore the disposal proceeds are deemed to equal the allowable costs. For more information on relief from gifts to charity and to find out what is a tainted donation, click here...

Disposal proceeds for different types of disposals

(other than a spouse/civil partner) are deemed to be made at market value. Any actual consideration (e.g. payment) given by the connected party for the cryptoasset is ignored. Instead, the disposal proceeds used in the capital gains calculation is the market value of the cryptoasset disposed of, at the date of disposal. Losses can only be used against gains to the same connected person.

The exception is where the , for which there are special inter-spouse transfer rules instead.

Gifts to a spouse or civil partner

🎁
Disposals made to a connected party
gift is to a spouse or civil partner
💍Spouse Transfers
🎗️Gifts to Charity, CASCs & Bodies for a National Purpose
💷Selling Crypto for Fiat
🔄Trading Crypto to Crypto
🛍️Purchases using Crypto
🎁Gifts