Which Taxes Apply?

Anyone who trades (buys/sells) or mines cryptoassets, or uses cryptoasset derivatives, needs to first consider if they are engaged in financial trading in cryptoassets (ie a business activity), rather than simply assuming they are classed as an investor and taxed under the capital gains tax regime/miscellaneous income regime.

HMRC state: "Only in exceptional circumstances would they expect individuals to buy and sell exchange tokens with such frequency, level of organisation and sophistication that the activities amount to a trade in itself."

Whether or not there is financial trading in cryptoassets is a complex area. We recommend you read our detailed guidance and consult a professional tax advisor to consider your specific circumstances.

pageInvestor or Trader?

Assuming the cryptoasset activity is not treated as a financial trade, here is an overview of the most common tax treatment for different types of crypto activity. Click the activity type for more detailed information.

Disposal/Activity TypeCapital Gains TaxIncome Tax

✅​​

✅​​

✅​​

✅​​

❌ (if conditions met)

❌ (if conditions met)

​🎈 Airdrops​​

❌*​

✅ (Sometimes)

🤝 Staking​​​

✅​​ (if beneficial ownership is transferred)

❌​​

❌^

❌*

​​❌*​

Potential to claim capital losses​

​​✅​​

​❌*

​​✅​​ (if beneficial ownership is transferred)

❌^

✅​​​​​​ (Individual discretion)

✅ (Individual discretion​)

✅​​ (if beneficial ownership is transferred)

​​❌

✅​​ (if beneficial ownership is transferred)

​​ (if beneficial ownership is transferred)

❌*

❌*​

❌*

❌*

*​​

* No Capital Gains Tax at the time of acquisition, but it is subject to capital gains tax when the cryptoasset is later disposed.

^ may affect Capital Gains Tax base cost, though.

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