The UK’s Her Majesty’s Revenue and Customs (HMRC) regulations require that you report crypto transactions and pay CGT or income tax on any gains. In general, Crypto Tax in the UK 2025 is considered an asset, and any gains on them may be subject to CGT or income tax depending on how they’re disposed of. This can include selling crypto for fiat, trading crypto on exchanges, and even gifting NFTs to others. Tracking these gains can be challenging, especially if you’ve traded between different wallets and exchanges. Luckily, software like CoinLedger automatically connects to your wallets and exchanges and can help you generate a complete tax report in minutes.

Crypto Tax in the UK 2025: What Investors Need to Know

Whether you’re an investor or trader, your crypto-related transactions must be reported to HMRC. As a general rule, HMRC considers most people who buy and sell crypto as investors and treats their profits as capital gains. However, if you engage in activities like mining or participate in a crypto fork or airdrop that changes the ownership of your crypto, you’ll likely be deemed to be a trader and be required to pay income tax on your profits.

For most crypto holders, the biggest risk of HMRC investigations comes from unreported gains. HMRC can review your past financial statements up to four years, and if you’re found to have underpaid your taxes, you could be subject to a penalty of up to 45%. You can reduce your risks by reporting your cryptocurrency activity on time and accurately, including all relevant information like your purchase and sale history.