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). 


About Us

We are chartered accountants and registered auditors established in 1946, we have been based in Staplefield near Haywards Heath since 2004. With a client base throughout the southeast, our location is the focal point between Crawley, Horsham and Haywards Heath and Brighton.

Find out more...

Legal

The information contained on this website is provided by Carter Nicholls Ltd for general guidance and is aimed to offer the user general information only. Before making any decision or taking action, you should seek professional advice from a professional from Carter Nicholls or another qualified professional.

Read more....

Contact Us

Carter Nicholls Limited
Victoria House, Stanbridge Park, Staplefield Lane
Staplefield
West Sussex
RH17 6AS

info@carternicholls.co.uk
01444 401440

JUMP TO TOP