Chapter 6

Other Considerations

Here are some final considerations regarding cryptoasset taxes in the UK:

  • There's an annual tax-free capital gains allowance of £12,000 for crypto traders. Anything after that will generate a capital gains tax according to their tax bracket (10% for basic rate tax payers and 20% for high rate tax payers)

  • Pound sterling must be used in completing your Self Assessment tax return. Gain and loss values should always be converted to pound sterling, first using an appropriate and consistent valuation methodology.

  • Some crypto-to-crypto transactions may inherently not have a pound sterling value (for instance, a bitcoin to Litecoin transaction). As such, you should use an appropriate exchange rate for the crypto and pound sterling values during the time the transaction was made.

  • Keep all records of your valuation methodology so you can present it to HMRC in case of further inquiries.

  • For pensions, HMRC doesn't allow cryptos to be used for creating a relievable tax contribution to a pension scheme.

  • Cryptoassets are treated as property for Inheritance Tax perspectives and purposes.