Our crypto tax calculator

Basic Rate

If your total annual income, including your cryptocurrency gains, falls within the basic rate band, you’ll pay tax at the basic rate. As of the latest tax year (2023/24), the basic rate is 20%. This rate applies to incomes up to a certain threshold.

Higher Rate

If your income, including crypto gains, exceeds the basic rate threshold but stays below the higher rate threshold, you’ll be subject to the higher rate of tax. In the 2023/24 tax year, this rate is 40%.

Additional Rate

For individuals with even higher incomes, including substantial cryptocurrency gains, you may fall into the additional rate bracket. This is the highest tax bracket in the UK, with a tax rate of 45% in the 2023/24 tax year.

Long-Term Capital Gains

If you hold your cryptocurrency for at least 12 months before disposing of it, you fall into the category of long-term capital gains. The tax rate for long-term capital gains can range from 0% to 20%, depending on your overall income and tax circumstances. Holding onto your crypto for the long term can lead to potentially lower tax liabilities.

Short-Term Capital Gains

Conversely, if you decide to sell your cryptocurrency within 12 months of acquiring it, you’re subject to short-term capital gains tax. The tax rates for short-term gains range from 10% to 37%, again depending on your income and tax situation. Short-term gains typically incur higher tax rates.

So, in the UK, the length of ownership of your cryptocurrency plays a crucial role in determining the tax rate you’ll pay when you decide to dispose of your digital assets. It’s important to consider this factor when planning your crypto transactions to optimise your tax liability.

Hold for Long-Term

As mentioned earlier, holding onto your cryptocurrency for at least 12 months can qualify you for the long-term capital gains tax rate, which is typically lower than the short-term rate. If you have the flexibility to wait, this can be a tax-efficient strategy.

Use Tax-Efficient Accounts

Consider using tax-efficient accounts like Individual Savings Accounts (ISAs) or Self-Invested Personal Pensions (SIPPs) for your cryptocurrency investments. These accounts offer tax advantages, such as tax-free gains or tax relief, depending on the account type.

Offset Losses

If you have incurred losses from other investments, you can potentially offset these losses against your crypto gains to reduce your overall tax liability. This is known as capital gains tax loss relief.

Gift Allowances

In the UK, there are annual gift allowances that allow you to give cryptocurrency to family members or friends without triggering capital gains tax. This can be a way to share assets while minimising tax.

Tax Planning

Consult with a tax advisor or accountant who specialises in cryptocurrency taxation. They can provide guidance on how to structure your crypto activities in a tax-efficient manner, taking advantage of all available allowances and deductions.

Report Accurately

Ensure that you accurately report your cryptocurrency transactions and gains on your tax return. Failure to do so can result in penalties. Keeping detailed records of your transactions is crucial.