How Much Tax Will I Pay?
Last updated
Last updated
There is an annual CGT allowance (called the annual exempt amount). You only have to pay capital gains tax on your gains above this.
| Tax Year | CGT Annual Exemption |
|---|---|
2020/21 | £12,300 |
2021/22 | £12,300 |
2022/23 | £12,300 |
CGT is payable on the net taxable gain for the tax year. The taxable gain is the total capital gains less total losses in the year, less the CGT annual exemption. Capital losses brought forwards from earlier tax years, can also reduce the net taxable gain.
The rate of CGT on the net taxable gains for the tax year depends on the level of income in the same tax year and the type of asset being disposed of. Crypto gains are taxed at CGT rates of 10% and 20% depending on the income levels. Where the taxable income is more than £50,270, the CGT rate is 20%. To the extent that the taxable income is less than £50,270, this amount of capital gains are subject to the 10% CGT rate.
For example, a UK taxpayer with income of £30,270 and £60,000 taxable capital gains from crypto will pay CGT at 10% on £20,000 of the capital gains and 20% on the remaining £40,000.
| Taxable Income | Tax Bracket | Crypto CGT Rate |
|---|---|---|
Up to £50,270 | Basic Rate | 10% |
£50,270 + | Higher Rate | 20% |
The annual exempt allowance is applied to the total capital gains across all capital assets (including property, shares, antiques etc), not just cryptoassets.
The rates of income tax depends on the overall income level and other types of income in the year. As a rough guide, the current income tax rates for 2021/22 are below.
| Taxable Income | Tax Bracket | Tax Rate |
|---|---|---|
Up to £12,570 | Personal Allowance* | 0% |
£12,571 - £50,270 | Basic Rate | 20% |
£50,271 - £150,000 | Higher Rate | 40% |
£150,000+ | Additional Rate | 45% |
* The Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means the personal allowance is Nil if the income is £125,140 or above.
Net miscellaneous income from cryptoassets (after the deduction of allowable expenses or the trading allowance) is subject to income tax, but not national insurance.
Individuals who are classified as financial trading in cryptoassets are required to pay income tax and national insurance on their profits, rather than capital gains tax on their capital gains.
Employment income received in cryptoassets is subject to income tax and national insurance and will most likely be paid via PAYE.
