Tax on sale of cryptoassets
27/05/2021

Most individuals hold cryptoassets (such as Bitcoin) as a personal investment, usually for capital appreciation in its value or to make purchases. 

HMRC is clear that these holdings will usually be subject to Capital Gains Tax (CGT) when: 

  • selling tokens
  • exchanging tokens for a different type of cryptoasset
  • using tokens to pay for goods or services
  • giving away tokens to another person (unless it is a gift to your spouse or civil partner)
  • donating coins to charity 

To check if you need to pay CGT, you will need to work out your gain for each transaction. The way a gain is calculated is different if you sell tokens within 30 days of buying them. If the asset was acquired free of charge, then the market value at the time should be used to calculate the gain. 

Taxpayers can deduct certain allowable costs when working out their gain, including the cost of:

  • transaction fees paid before the transaction is added to a blockchain
  • advertising for a buyer or seller
  • drawing up a contract for the transaction
  • making a valuation so they can work out the gain for that transaction

If the taxpayer’s activity is trading, then Income Tax will take priority over CGT and will apply to profits (or losses). 


CONTACT US

Bath Office
6 Gay Street
Bath
BA1 2PH
Tel: 01225 445196

Salisbury Office
Suite1, 24-25 Barnack Business Centre
Blakey Road
Salisbury
SP1 2LP

Email: enquiries@berkeleybate.co.uk

Memberships

Newsfeed Search


Links

Registered Name: Berkeley Bate Ltd Registered Company no: 7581153 Registered in the UK 
Registered Address: – Suite 1, 24-25 Barnack Business Centre, Blakey Road, Salisbury, SP1 2LP
VAT Registration No: 109 8958 67 16