If you make a profit when selling, exchanging or disposing of cryptocurrency (including spending it on goods and services) in the UK you may have to pay Capital Gains Tax. The CGT rate is 10% for basic rate taxpayers and 20% for higher-rate taxpayers. The annual exemption amount is PS3,000 for the 2024/2025 tax year, with any gains above this being taxable.Go here :theinvestorscentre.co.uk
UK Crypto Taxation 2025 – Key Updates and What You Need to Know
Generally, HMRC considers your crypto to be an asset rather than money, so most individuals who hold their crypto as an investment will only pay tax when they dispose of it. However, if you mine cryptocurrency or receive it as part of an employment contract, you will normally have to declare it as income and pay employee National Insurance through PAYE. In addition, if your employer gives you crypto that can be easily exchanged for cash, they will usually need to deduct PAYE taxes and report it on a P11D form before giving it to you.
HMRC rules state that you must record the market value of a cryptocurrency at the time it is received or sold. The cost basis is used to calculate capital gains and losses when you dispose of a crypto. HMRC uses the share pooling approach to calculate cost basis, which allows you to track your gains and losses in a consistent way. This also helps prevent shady strategies like wash sales that try to manipulate your CGT liability by selling and repurchasing the same assets within 30 days.