What You Need to Know
By 7 Accountants
When you invest in cryptocurrency, one of the most important tax topics you need to understand is capital gain—and in particular crypto capital gains tax. If you’re in the UK (or are subject to UK tax rules), it’s essential to know how capital gains tax on crypto UK works, what the UK capital gains tax crypto rates 2025 are, how to use a crypto capital gains tax calculator, and how to tell how much is capital gains tax on crypto. We’ll also cover your crypto tax return UK, tax return crypto, crypto tax bracket, crypto capital gain brackets, and how the capital gain tax band, basic tax band, higher tax band, and additional tax band affect your tax bill.
At 7 Accountants, we believe that taking an active, informed approach to crypto taxation is the best way to stay compliant and optimise your tax position.
What is Capital Gain?
Capital gain refers to the profit you make when you sell or dispose of an asset for more than you originally paid. With cryptocurrency, the same principle applies: when you sell, swap or use crypto and the value has increased, you may trigger a capital gain. If you made a loss, you can sometimes offset that loss against other capital gains (within certain rules).
In the crypto world, each time you dispose of crypto—whether by selling for fiat, swapping for another coin, or using it to buy something—you may generate a taxable event. The UK tax authority, HM Revenue & Customs (HMRC), treats these as disposals for capital gains tax purposes.
Because of the complexity of crypto transactions (swaps, gifts, forks, staking etc.), it’s important to maintain accurate records. As 7 Accountants always emphasises: good record-keeping is the foundation of compliant tax reporting.
How Crypto Capital Gains Tax Works in the UK
When you owe crypto capital gains tax
If you dispose of crypto and you’ve made a profit (a gain), you may owe crypto capital gains tax. It doesn’t apply just when you cash out to fiat – exchanging one crypto for another is also considered a disposal under UK rules.
Activities that can trigger capital gain include:
- Selling crypto for pounds or another currency
- Exchanging one cryptoasset for another
- Using crypto to purchase goods or services
- Possibly lending crypto or staking if disposal rules apply (depending on circumstances)
If you generate income from crypto (for example from mining, airdrops or staking) rather than simply disposing, then the tax treatment may shift to income tax rather than capital gains tax.
Rates and allowances for 2024-25 and 2025 (crypto-specific)
For the UK tax year 2024-25 (and into 2025), there have been some significant changes relevant to crypto investors:
- The annual tax-free allowance for capital gains (Annual Exempt Amount) is £3,000 for 2024-25.
- Rates for gains on crypto or other assets (other than residential property) changed on 30 October 2024. For disposals before that date:
- Basic rate taxpayers: 10%
- Higher/additional rate taxpayers: 20%
- Basic rate taxpayers: 10%
- For disposals on or after 30 October 2024:
- Basic rate band: 18%
- Higher/additional rate band: 24%
- Basic rate band: 18%
Under the general CGT rules from 6 April 2025, for non-residential capital assets:
- 18% for basic rate income tax payers
- 24% for higher/additional rate payers
Therefore, for crypto capital gains tax UK-based investors should anticipate rates of 18% or 24% depending on their income tax band and the date of disposal.
How the tax-bands (basic, higher, additional) affect you
Your crypto tax bracket in this context depends on your total taxable income plus your gains (after allowance). The basic tax band is for those whose taxable income remains within the basic rate band. The higher tax band and additional tax band come into play when your income pushes you into those thresholds.
For example:
- If your taxable income is within the basic rate (say £40,000), and you realise crypto gains, you will pay the basic rate CGT (e.g., 18%) on the gains (once allowance is taken into account).
- If your combined income + gain pushes you into the higher rate band (say above ~£50,270 in 2024/25), then part of the gain may be taxed at the higher rate of 24%.
Thus your capital gain tax band depends on your income tax band and when the gain occurred. 7 Accountants advises you to project your income + gain to figure out where your tax liability falls.
How to calculate your gain (and use a calculator)
To compute your crypto capital gains tax:
- Determine the disposal date and convert to pounds sterling (GBP) the value of proceeds.
- Subtract your cost basis (what you paid + allowable costs/fees) to get the gain.
- Deduct the annual exempt amount (£3,000 for 2024/25).
- Add the remaining gain to your taxable income to understand which band you fall into.
- Apply the correct CGT rate (18% or 24% depending on your band and date of disposal).
- If you have losses from crypto disposals, you can carry them forward or offset them against your gains (within rules).
You can also use a crypto capital gains tax calculator (many online tools) that allow you to input your gain, cost basis, allowance and income level to estimate your tax liability.
Example scenario
Let’s say you have taxable income of £45,000 and you realise a crypto gain of £10,000 after cost basis and fees.
- Deduct the £3,000 allowance → £7,000 taxable gain.
- Add your income + gain = £52,000 → this pushes into the higher rate band.
- Assuming the 18% rate applies to the part within the basic band and 24% for the part above – you’ll split the gain accordingly.
7 Accountants would encourage you in such a scenario to project ahead and consider timing your disposal to stay within lower bands if possible.
Key Topics: FAQs Explored
What is the difference between a crypto capital gain and income from crypto?
Crypto capital gain arises when you dispose of cryptocurrency and make a profit from the change in value. Income from crypto arises when you receive crypto as payment, staking reward, mining reward or airdrop. Income is taxed via income tax bands; capital gains trigger CGT.
How much is capital gains tax on crypto in the UK?
You will pay CGT depending on your tax band: basic rate band gains are taxed at 18% (for 2024/25 current rate) and higher/additional rate band gains at 24% (for disposals after 30 Oct 2024) after the £3,000 allowance. Disposals before that date pay 10%/20%.
How do I know if I fall into the basic, higher or additional tax band?
Your tax band is determined by your taxable income (salary, dividends, etc). Basic rate band applies until ~£50,270 (2024/25), higher rate applies above that, and additional rate applies above ~£125,140. For crypto gains you add the gain to your income to work out which band the gain sits in.
Do I always have to report crypto on a tax return?
If your crypto disposals generate gains above your allowance or require you to fill the Self Assessment return, yes. As of tax year 2024/25 the tax return has a dedicated crypto-section.
Does the allowance (annual tax-free gain) apply to crypto?
Yes. For 2024/25 the annual exempt amount for capital gains is £3,000. That applies across all assets including crypto. If your gains are below that and you don’t need to submit a return for other reasons, you may not owe CGT.
Can I offset losses from crypto?
Yes. If you realise a loss on a crypto disposal, you can register that loss with HMRC and offset it against future capital gains. Good records are key.
Why It Matters for Crypto Investors
For someone trading or holding crypto, failing to correctly calculate and report capital gain and thus the crypto capital gains tax can lead to penalties. HMRC is increasingly focused on crypto-asset reporting and non-compliance. As per media reports, they’ve significantly ramped up warnings to crypto investors.
At 7 Accountants we emphasise that proactive tax planning around crypto — knowing your potential gain, your tax band, and timing of disposals — can reduce your tax burden and reduce unexpected liabilities. Timing matters greatly: the date you dispose, your income year, your gain size all change the rate you pay.
Conclusion
Understanding capital gain in the context of crypto is vital for any investor in the UK. Knowing when your disposal triggers a gain, how to calculate it, what the crypto capital gains tax will be, how your basic tax band, higher tax band, and additional tax band impact the rate, and ensuring you use the £3,000 annual allowance all matter. Whether you use a crypto capital gains tax calculator or seek professional advice from the team at 7 Accountants, it pays to be informed. With the UK rules evolving and HMRC increasing oversight, staying compliant and optimised is not optional — it’s essential.
FAQs
What triggers a crypto disposal?
Selling crypto for fiat, exchanging one crypto for another, using crypto to purchase goods/services, gifting crypto in some circumstances can all trigger a disposal.
When did the CGT rates change for crypto?
The Autumn 2024 Budget introduced higher rates from 30 October 2024: 18% basic / 24% higher for non-property assets including crypto.
Is staking or mining taxed as a capital gain?
Not typically. Staking or mining income is usually taxed as income tax rather than capital gains, but the exact treatment depends on context.
What happens if my income plus gain pushes me into a higher tax band?
Part of your gain may fall into the basic rate band and part into the higher rate band. You must calculate carefully to determine how much is taxed at which rate.
Do I need to submit a Self Assessment tax return for crypto?
If you have crypto disposals with gains above allowance, or you have other taxable income above thresholds, yes. The 2024/25 return includes a dedicated crypto section.
Can I use a calculator to estimate my crypto CGT?
Yes. Online tools (crypto tax calculators) let you input your gain, cost basis, fees, allowance and income to arrive at an estimate.
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