UHY Ross Brooke Chartered Accountants

Advanced Cryptotax Planning in the UK

crypto assets regulation

The crypto world is bursting with perplexing technicalities and regulations. So let’s break things down and simplify the complex terrain of cryptotax planning in the UK.

By Joshua Pearce – Crypto Tax Specialist

Introduction to Cryptotax

What is Cryptotax? Every time you get a crypto asset (sell, trade, or earn cryptocurrency), the government wants its share in taxes. Cryptotax refers to the taxes owed on any crypto transactions. Proper planning and record keeping can prevent tax issues later on.

Understanding the Basics of Cryptotax

Capital Gains Tax (CGT)

This tax springs into action when you sell your crypto for more than you bought it. Basically, if you made a sizeable enough profit, HMRC wants its share.

Income Tax on Crypto

Did you earn crypto? Maybe through mining or as payment for goods and services? So that’s taxable too. Income tax applies to the value of the cryptocurrency when it was received.

Advanced Cryptotax Strategies

This is where the real magic (and confusion) happens.

Tax-loss Harvesting

It sounds fancy, but in essence, it’s about selling assets that are at a loss to offset the gains from other assets. It’s like a see-saw. If one side is too high (gains), you can balance it with the other (losses).

Using Crypto Loans

Instead of selling your crypto assets and triggering a taxable event, why not use them as collateral for a loan? This way, you get the funds you need without the tax headache.

Gifting Crypto Assets and Inheritance

Gift your crypto assets to loved ones. While there might be inheritance tax considerations, gifting can be a strategic move in certain situations.

Navigating Regulatory Changes

Recent UK Cryptotax Updates

The UK landscape is ever-changing. From tweaks to existing laws to brand-new regulations, staying updated is crucial. Remember, it’s not just about being compliant; it’s about optimizing your strategy within the boundaries of the law.

For savvy investors, these changes can be a double-edged sword. On one hand, they provide clarity. On the other, they might require strategy shifts. Flexibility is key.

Seeking Professional Advice

Navigating cryptotax can be overwhelming. But you don’t have to go it alone. Seeking professional advice can provide clarity and the assurance that you are meeting your obligations with HMRC.

Finding a Cryptotax Advisor

Look for an advisor like me who has a deep understanding of both the crypto world and the UK’s tax landscape.

Cryptotax planning in the UK, while complex, isn’t an insurmountable challenge. With the right strategies and expert advice, you can navigate this terrain like a pro. So if you feel ready to tackle cryptotax with newfound confidence, get in touch with our crypto tax advisors.

Cryptotax FAQs

  1. How are crypto-to-crypto trades taxed? In the UK, every crypto-to-crypto trade is a taxable event, with capital gains tax being applicable on the profit or loss in most circumstances.
  2. What if I only hold my cryptocurrency and never sell? You’re only liable for capital gains tax when you dispose of your cryptocurrency, which includes selling, trading, or using it to purchase items.
  3. Can I claim losses if my crypto gets stolen or lost? Unfortunately, lost or stolen cryptocurrency cannot be claimed as a capital loss. It’s essential to keep your wallet and crypto assets secure.
  4. How are crypto gifts taxed? The gift of crypto is a disposal and treated as if you had sold for full value (this doesn’t apply between spouses), the recipient will then be taxed on any growth in value when they later sell.
  5. What records should I keep for cryptotax purposes? Maintain detailed records of all your crypto transactions, including dates, amounts, the value in GBP at the time of transaction, and wallet addresses. This ensures you’re prepared for any HMRC inquiries.

Ask us about your crypto tax issues and let’s help you to stay on the right side of the law.


How we can help

We have an experienced team of crypto tax advisors familiar with the unique challenges relating to crypto trading and currency who can provide support with:

Meet our Crypto Tax Specialist Advisors​

Phil Kinzett-Evans crypto tax director

Phil Kinzett-Evans

Crypto Tax Director

Joshu Pearce, Tax Manager, Crypto Tax specialist

Joshua Pearce

Senior Crypto Tax Manager

Tom Annat, Senior tax manager, crypto tax specialist

Tom Annat

Senior Crypto Tax Manager

crypto tax specialist UK

Chris Davies

Crypto and AI Director

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