Are cryptocurrencies taxable in UK?

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Are cryptocurrencies taxable in UK?

 Are cryptocurrencies taxable in UK?
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  • The Her Majesty’s Revenue and Customs (HMRC) doesn’t consider crypto assets to be money.
  • According to a report by Chainalysis, crypto transactions in the UK are worth US$170bn (£123 billion).

Cryptocurrency adoption in the UK has grown at an exponential rate. The citizens are enthusiastic about digital assets and happy to trade in cryptocurrencies. At present, the cryptos are used for investment as well as they can be used at various retail stores as an alternate payment service. According to a recent report by Chainalysis, crypto transactions in the UK are worth US$170bn (£123 billion). 

Most countries are planning to tax cryptocurrencies rather than banning them. Countries like the US, Thailand, India etc., all have introduced different tax slabs on the capital gains made on cryptocurrencies.

In the UK, the Her Majesty's Revenue and Customs (HMRC) doesn't consider crypto assets to be money. The HMRC has decided to club the cryptos under four main categories: Exchange tokens, Utility tokens, Security tokens, and Stablecoins. The exchange tokens are intended to be used as a mode of payment.

Also read: Squid Games, Tesla Coin: Famous Crypto Coins that are Dead Now

Utility tokens are tokens that provides some value in return. Security tokens are dubbed as those that give the holders the ownership rights and are entitled to a share in future profits. Whereas stablecoins are those whose value is pegged to fiat currencies or other similar assets. 

The taxation 

The UK residents are taxed on the gains just like they are taxed for any profits or gains made on stocks or shares. So, every time an individual swaps one coin for another or purchases any goods, they are triggering disposal for UK capital gains tax purposes. 

Besides, if an individual receives cryptos either in an airdrop or in form of their salaries, they have to pay taxes. Also, some of the mining activities, resulting in the cryptos, will be taxed. But, for instance, crypto assets are donated to a charity firm, then they won’t be taxed, until and unless their value is more than the acquisition cost. But, in case, if someone incurs losses during any crypto dealings, then it becomes a tax liability and won't be considered as capital gains. 

Also read: Why is SPELL crypto gaining traction today?


Cryptocurrencies in UK are not a legal tender, but it is mandatory for citizens to declare the capital gains made from them filing taxes. Those who fill their IT return sheets themselves can go to various tax calculator websites, such as Koinly, TokenTax, and CoinTracker, which can help investors in managing their taxes.

Having said that, it's also critical to note that cryptos are volatile assets, and their prices can change at any given point in time. Therefore, one must be vigilant and do the requisite market research before taking any investment decisions. 

Risk Disclosure: Trading in cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.


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