UK Tax Fundamentals
Crypto Capital Gains Tax Allowances, Rates & Losses (UK)
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Contents
If you dispose of cryptocurrency in the UK, any profit may be subject to Capital Gains Tax (CGT).
This article explains how CGT applies to crypto for the 2024–2025 tax year, focusing on:
- Current CGT rates and how the mid-year rate change affects them
- The £3,000 annual exempt amount and how it interacts with different rate periods
- How capital losses work and how long you have to report them
- The “bed and breakfasting” rules, including how transfers between spouses interact with those rules
The scope is UK resident individuals holding crypto personally. The purpose is to explain HMRC’s rules clearly and accurately, not to give personalised tax advice.
Capital Gains Tax Rates on Crypto
The Position for 2024–2025
Capital Gains Tax rates for most assets, including crypto, changed partway through the 2024–2025 tax year. This means the date of disposal determines which rate applies.
Disposals before 30 October 2024
- 10% for gains within the basic rate band
- 20% for gains above the basic rate band
Disposals on or after 30 October 2024
- 18% for gains within the basic rate band
- 24% for gains above the basic rate band
These rates apply to crypto and other non-property assets.
How HMRC Decides Which Rate Applies
For each disposal, HMRC looks at:
- The date the disposal occurred, and
- Your total taxable income and gains for the year
A single tax year can therefore contain disposals taxed at different CGT rates.
Example: Rate Change Mid-Year
Assumptions
UK resident individual. Gains fall within the basic rate band.
What happens
- Sold crypto in September 2024:
Gain of £4,000 - Sold crypto in December 2024:
Gain of £4,000
Tax position
- September gain: 10% rate
- December gain: 18% rate
Even though both disposals are in the same tax year, they are taxed at different rates.
The Annual Capital Gains Allowance
The Allowance for 2024–2025
For the 2024–2025 tax year, the Capital Gains Tax annual exempt amount is £3,000.
This is the total amount of capital gains you can realise across all assets before CGT becomes payable.
How the Allowance Is Applied
- The allowance applies once per tax year
- It applies to total net gains, not per asset or per exchange
- It cannot be carried forward or transferred
- It is applied after allowable capital losses are deducted
Strategic Interaction With the Mid-Year Rate Change
Because CGT rates increased on 30 October 2024, the timing of disposals affects not only the tax rate but also how valuable the £3,000 allowance is.
HMRC does not require the allowance to be allocated proportionally or chronologically. In practice, it is applied in the way that minimises the total CGT due.
Example: Allowance Used Against Higher-Rate Gains
What happens
- Gain before 30 Oct 2024: £3,000
- Gain after 30 Oct 2024: £3,000
Outcome
- The £3,000 allowance offsets the later gain (saving 18%/24% tax).
- CGT is paid on the earlier gain (at 10%/20%).
This reduces the overall tax bill compared to offsetting the lower-rate gain first.
When You Must Report Crypto Disposals
The £50,000 Proceeds Rule
Even if no Capital Gains Tax is due, reporting may still be mandatory.
For the 2024–2025 tax year, if you are already within Self Assessment, you must report your capital disposals if your total disposal proceeds exceed £50,000.
This threshold is based on gross proceeds, not profit.
That means sell value before costs, including swaps and non-cash disposals. Even if the overall result is a loss or zero gain.
If total proceeds exceed £50,000, the disposals must be reported, even if the £3,000 allowance eliminates any tax.
Capital Losses on Crypto
What Is a Capital Loss?
A capital loss occurs when crypto is disposed of for less than its allowable cost. Losses can arise from:
- Selling at a lower price
- Crypto-to-crypto swaps at a loss
- Spending crypto when its value has fallen
- Certain DeFi transactions that crystallise losses
Losses are fully recognised under CGT rules.
How Losses Are Used
Losses are applied in this order:
- Offset against gains in the same tax year
- Any remaining losses can be carried forward
Losses reduce gains before the annual exempt amount is applied.
Deadline to Report Capital Losses
To preserve a capital loss for future use, it must be reported to HMRC within a fixed time limit: four years from the end of the tax year in which the loss arose.
For a loss incurred in the 2024–2025 tax year, the deadline is 5 April 2029.
If a loss is not reported by this deadline, it cannot be carried forward or used later.
Example: Carrying Forward Losses
Year 1 (2024–2025)
Gains: £2,000 | Losses: £6,000
Result: Net loss of £4,000 carried forward (if reported by April 2029).
Year 2
Gains: £9,000
£5,000 - £3,000 (Allowance) = £2,000 Taxable
Bed and Breakfasting Rules
What the Rule Prevents
HMRC prevents taxpayers from selling crypto to realise a gain or loss, and buying the same asset back shortly afterwards to reset the tax position. To prevent this, HMRC applies strict matching rules.
The Matching Order
When crypto is disposed of, HMRC matches the disposal to acquisitions in this order:
- Same-day acquisitions
- Acquisitions within the following 30 days
- Section 104 pooled holdings (see record keeping)
The 30-day rule only applies if same-day matching does not.
The 30-Day Rule Explained
If you dispose of crypto and reacquire the same crypto within 30 days, HMRC matches the disposal to the repurchase and ignores your existing pooled cost.
Example: Bed and Breakfasting
What happens
- Sell 1 BTC on 1 June for £25,000
- Buy 1 BTC again on 10 June for £24,000
Tax Position
- The disposal is matched to the 10 June purchase
- Gain or loss is calculated using £24,000 as the cost
- The original pool is not used
Interaction With Spouses and Civil Partners
An important exception exists. If you sell crypto and your spouse or civil partner acquires the same crypto within 30 days:
- The 30-day rule does not apply to you
- Your disposal is not matched to their acquisition
This is because spouses are treated as separate taxpayers for matching purposes, yet transfers between them are "no gain, no loss". One spouse can dispose of an asset while the other acquires it immediately without triggering the 30-day rule.
Common Misunderstandings
- “Losses can be claimed at any time”
- They must be reported within four years of the end of the tax year.
- “The allowance should be used against the earliest gains”
- In practice, it offsets the gains where it reduces tax most.
- “The 30-day rule only applies to deliberate tax planning”
- Intention is irrelevant; the rule applies mechanically.
- “If there’s no tax to pay, nothing needs reporting”
- Reporting is still required if proceeds exceed £50,000.
Summary
- Crypto gains are subject to Capital Gains Tax in the UK
- CGT rates increased on 30 October 2024, making disposal timing important
- The £3,000 annual allowance is most valuable against higher-rate gains
- Disposals must be reported if total proceeds exceed £50,000
- Capital losses must be reported within four years to be preserved
- The 30-day rule prevents rapid sell-and-repurchase strategies, but does not apply to acquisitions by a spouse or civil partner
Understanding how rates, allowances, losses and matching rules interact is essential to calculating crypto tax correctly and avoiding unexpected outcomes under HMRC’s rules.
Need help calculating your tax position?
BlockBooks handles the complex matching rules, rate changes, and loss allowances automatically.