Cryptocurrency is typically subject to Capital Gains Tax when you sell, trade, or otherwise dispose of it. If you are considered a professional trader or receive cryptocurrency as payment for goods and services, it may be considered regular income and subject to Income Tax. Additionally, any earnings from mining or staking can also be taxed as income.

HMRC requires you to keep detailed records of all your cryptocurrency transactions. This includes dates of transactions, the value in GBP at the time of the transaction, the amount of cryptocurrency involved, transaction fees, and the purpose of the transaction (e.g., sale, trade, or payment for services). Maintaining accurate records is crucial for calculating capital gains and losses and ensuring compliance.

Yes, in the UK, you can offset your capital losses against your capital gains to reduce your overall tax liability. This includes losses from cryptocurrency investments. It's important to report these losses on your tax return to take advantage of this benefit.

At MyCryptoTax.co.uk, we provide a full range of crypto tax services, from preparing and filing your tax returns to offering strategic tax planning and advisory services. Our team of experts will help you understand your tax obligations, calculate your capital gains and losses, and ensure compliance with HMRC regulations.

Failure to report cryptocurrency transactions to HMRC can result in penalties, interest charges, and potential audits. It is important to stay compliant and report all taxable cryptocurrency transactions accurately. Our team can help you avoid these pitfalls by ensuring that your tax filings are accurate and complete.

If you only hold cryptocurrencies and do not trade, sell, or otherwise dispose of them, you are not required to report them for tax purposes. However, you should maintain records of your holdings and any transactions in case you decide to sell or trade in the future, as these actions could trigger tax liabilities.