Check if you need to pay tax when you sell cryptoassets

You may need to pay Capital Gains Tax if you make a gain when you ‘dispose’ of cryptoasset tokens (also known as cryptocurrency) by:

You need to work out your total gains from disposing of certain assets, including cryptoassets. If your total gain for the tax year (6 April to 5 April) is above the Capital Gains Tax tax-free allowance, then you must:

You may also need to pay other taxes if you receive cryptoassets.

You need to work out your gain for each transaction you make. The way you work out your gain is different if you sell tokens within 30 days of buying them.

Your gain is normally the difference between what you paid for an asset and what you sold it for. However, there are some situations when you need to use the market value to work out your gain. For example, if you have cryptoassets that have been transferred between ‘connected persons’.

If you’ve paid Income Tax on any part of your cryptoasset token value, then you will not pay Capital Gains Tax on that amount. You’ll only pay it on any gain you make after receiving them. For example, if you dispose of tokens you received as earnings from your employment.

You must group each type of token you own into ‘pools’ and work out the pooled cost for each type — this is known as ‘pooling’ the costs.

You buy 100 token XY for £2 each. The total cost is £200.

You later buy 300 token XY for £1 each. The total cost is £300.

In total, you have 400 token XY costing £500 — the average cost of each token is £1.25.

If you sell 200 token XY, the cost of the tokens for your tax calculations is £250 (£1.25 multiplied by 200). Deduct this from what you sold the tokens for to work out your gain.

Do not pool the cost of your tokens if you buy them: