UK Tax Fundamentals

Do I Have to Complete a UK Tax Return If I've Only Made Crypto Losses? (2025-26)

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This guide explains when a UK resident individual must complete a Self Assessment tax return if their crypto activity for the 2025-26 tax year results only in capital losses, and how to claim those losses so they can be used against future gains.

It focuses on:

The difference between owing tax and having a filing obligation
When a return is still required despite an overall loss
How to claim and preserve losses for future years

Assumptions: UK resident and domiciled individual, investment activity (not a trading business), net capital losses on crypto disposals, and no other reasons to file a return. If any of these assumptions are wrong, the answer can change.

The Key Distinction: Tax Due vs Filing Duty

If your crypto disposals produce an overall capital loss in 2025-26, there is no Capital Gains Tax to pay for that year because there is no net gain.

Tax Due

No Capital Gains Tax is payable when the year ends in a net loss.

Filing Duty

You may still have to file if HMRC requires it or you want losses recorded.

That does not automatically answer the filing question. Whether you must file depends on whether you are already within Self Assessment or HMRC has issued a notice to file, and whether you want HMRC to record your losses for future use.

For most individuals, crypto disposals are taxed under Capital Gains Tax rules. A disposal includes:

Selling crypto for GBP or another fiat currency
Swapping one token for another
Using tokens to pay for goods or services
Giving tokens away (with limited exceptions)

Losses arise when disposal proceeds are lower than the allowable cost plus allowable fees.

When You Must Complete a Tax Return

You generally must complete a Self Assessment return if any of the following apply.

HMRC has asked you to file

If HMRC issues a notice to file a tax return, you must file it even if your crypto result is a loss.

You are already within Self Assessment

If you are already registered for Self Assessment for another reason, you still need to submit the return on time. In that case it is usually sensible to include your crypto disposals and claim the losses through the return.

You have other taxable crypto income

This guide is about losses on disposals. But many people have taxable crypto income even when disposals are net losses. Examples include staking or lending rewards, mining income, and certain airdrops connected to a service or activity. If that income brings you into Self Assessment, you may need to file even if disposals are a net loss.

When You May Not Need a Return

If you are not in Self Assessment, HMRC has not asked you to file, and your only relevant activity is crypto disposals that result in a net capital loss, you will often be able to avoid completing a tax return.

Losses are only useful if you claim them.

A capital loss is not normally usable against future gains unless it is quantified and notified to HMRC within the time limit.

How to Claim Crypto Losses

Option 1: Claim via Self Assessment

If you are filing a return anyway, you normally claim the loss on the Capital Gains pages and keep supporting calculations and records.

Option 2: Claim by writing to HMRC

If you are not in Self Assessment and have never made a gain, HMRC allows you to claim by writing to them instead of filing a return.

Your claim should include:

Your full name, address, and National Insurance number
The tax year of the loss, for example 2025-26
A statement that you are not within Self Assessment and you are notifying a capital loss
A schedule of disposals showing the date, asset, proceeds (GBP), allowable cost (GBP), allowable fees (GBP), gain or loss (GBP), and the total net capital loss you want HMRC to record

Keep copies of everything you send, along with your working papers and exchange or wallet records.

Time limit to claim

You can usually claim a capital loss up to four years after the end of the tax year in which the disposal happened. For the 2025-26 tax year (6 April 2025 to 5 April 2026), the deadline is 5 April 2030.

Practical Examples

1Example 1 — Simple sale at a loss

Assumptions: UK resident individual. Single buy and sell. Fees included as allowable costs.

Transactions

10 June 2025: Buy 1.0 BTC for £12,000 (including fees)
20 February 2026: Sell 1.0 BTC for £8,500 (net proceeds after fees)

Calculation

Disposal proceeds: £8,500
Allowable cost: £12,000
Capital loss: £3,500

Result: Net capital loss for the year is £3,500 and Capital Gains Tax due is £0. Claim the loss if you want to use it against future gains.

2Example 2 — Multiple disposals, net loss

Assumptions: UK resident individual, investment activity, no other income requiring Self Assessment.

Transactions in 2025-26

Sold ETH for a £1,200 loss
Swapped SOL into another token for a £900 loss
Sold a small holding for a £250 gain

Net position

Total gains: £250
Total losses: £2,100
Net capital loss: £1,850

Result: No CGT is due because the year is a net loss. If you claim it properly, the £1,850 can be carried forward.

Common Misunderstandings and Edge Cases

"If I lost money, HMRC will know automatically.": Losses usually need to be notified to HMRC in a quantified amount within the time limit.
"If a token went to zero, I can claim the loss without selling.": Not always. In many cases a loss only arises on a disposal. Some claims can treat assets as disposed of, but the rules are technical and evidence-driven.
"Losses reduce my Income Tax.": Usually not. Investment losses are capital losses and are used against capital gains, not employment income.
"Crypto losses mean it must be a trade.": HMRC treats most individuals as investing, not trading. Trading depends on a wider set of facts.
"If I'm already in Self Assessment, I can skip the return because I made no gains.": If you are required to file, you still need to submit the return on time, even when the result is a loss.

Clarifications and Caveats

This guide focuses on UK resident individuals. Different rules can apply to companies, trustees, and non-UK residents.
Crypto income such as staking, mining, certain airdrops, and DeFi rewards can create a filing requirement even when disposals are net losses.
Capital gains and losses can be complex due to pooling and matching rules. \"I made a loss overall\" is not a substitute for a proper calculation.

Summary

If you only made crypto capital losses, you usually do not owe Capital Gains Tax for that year.
You may still need to complete a return if HMRC has issued a notice to file, you are already within Self Assessment, or you have other taxable income that requires Self Assessment.
If you are not in Self Assessment and HMRC has not asked you to file, you may not need a return, but you should claim losses if you want to use them later.
Loss claims normally need to be made within four years after the end of the tax year in which the loss arose.

If in doubt, treat the loss claim as a compliance task. It is the only way to preserve the value of the loss for future years.

Need help calculating or claiming crypto losses?

BlockBooks prepares HMRC-ready schedules and working papers so losses are claimed correctly and remain usable against future gains.

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