Since cryptocurrencies are regarded as assets rather than legal tender in the UK, they may be subject to income tax or capital gains tax (CGT), depending on your activity. You are subject to capital gains tax whether you sell, trade, give, or buy cryptocurrency. You only pay taxes on the profit that exceeds the yearly CGT allowance, which is £3,000 in 2025. Higher-rate taxpayers pay 20%, while those with basic rates pay 10%. If you get cryptocurrency by mining, staking (as a business), or as payment, you are subject to income tax. Your income band will determine how this is taxed, just like regular income.
Any earnings or losses in cryptocurrency must be reported on your self-assessment tax return. Dates, pricing, and wallet information must all be accurately recorded in transactions for HMRC to use. Purchasing cryptocurrency, holding it without selling it, moving it between wallets, and giving it to your spouse are examples of non-taxable activities. HMRC is collaborating closely with cryptocurrency exchanges in 2025 to find instances of non-compliance.
- In addition, they are examining DeFi profits and staking incentives for potential tax adjustments.
- To remain in compliance: Track your transactions with tax software.
- On-time file return See a cryptocurrency tax advisor if necessary.
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