Most individuals hold cryptoassets (such as Bitcoin) as a personal investment, usually for capital appreciation in its value or to make purchases.
HMRC is clear that these holdings will usually be subject to Capital Gains Tax (CGT) when:
To check if you need to pay CGT, you will need to work out your gain for each transaction. The way a gain is calculated is different if you sell tokens within 30 days of buying them. If the asset was acquired free of charge, then the market value at the time should be used to calculate the gain.
Taxpayers can deduct certain allowable costs when working out their gain, including the cost of:
If the taxpayer’s activity is trading, then Income Tax will take priority over CGT and will apply to profits (or losses).