What can be done with crypto losses?Posted 2022 by Jane L
Recent news about crypto is full of doom and gloom. Binance have suspended trading, Coinbase have announced they will lay off almost 1/5 of their staff and Bitcoin is trading at its lowest point in 18 months. (By comparison, the US stock market is also at its lowest point in the same timeframe, although the percentage damage is considerably lower).
The number of people holding crypto assets has risen dramatically in the last couple of years, with an estimated 10 million in the UK alone. More of these are losing value in their crypto investments than are gaining, and ever more so when forced into selling crypto assets to pay their real world fuel bills and day to day expenses at such unfavourable prices.
That said, these losses may be of at least some value.
You will be able to offset any current year losses against future gains, but only if they are claimed within a 4 year window. Once claimed, losses can be carried forward indefinitely.
How do you register your crypto losses with HMRC?
It is important to submit a tax return even if you are not required to do so in order to be able to offset your losses. It’s simply a case of filling out a self assessment tax return with HMRC.
It does not matter whether the losses are on crypto, stocks, shares or other investments – it’s well worth registering them.
If you are unsure how to proceed with tax for any gains and losses, please get in touch
Need more advice on Crypto / NFT tax from a Crypto specialist accountant?
We have a lot of information about the UK tax situation for Crypto and NFT on our website which you may want to read before getting in touch.