Crypto Tax Advice For Individuals

Get Advice

Crypto Tax in the UK

The world of cryptocurrency has substantially evolved over time. In this complex financial landscape, for individuals it is best to seek crypto tax advice from professional crypto tax accountants. At MJ Kane, our accountants are leading experts in everything crypto ensuring that you can minimise the amount you owe in tax when it comes to crypto gains.

The UK’s HM Revenue and Customs (HMRC) has made it clear that cryptocurrency is taxable, even if you’re not selling or buying any goods. The agency states traders should consult their tax advisors about how they might be able to pay taxes on this new form of money before making transactions — as well as when those earnings are realised.

How our Accountants can help you!

  • How Are Individuals in the UK taxed?

    HMRC have stated that profits made on cryptocurrency are taxable either to Corporation Tax if within a company / business , or to Income Tax or Capital Gains Tax if held by an individual. In most cases individuals are more subject to capital gains tax from crypto however in some cases an individual may be required to pay Income Tax and National Insurance depending on their level of crypto activities.

    Some activities that may be tax liable are as follows:

    Buying and Selling Crypto Currency
    When You Are Paid or Remunerated In Crypto Currency
    Mining and Validaating
    Crypto You Inherit – you could be liable for inheritance tax

  • Crypto and Capital Gains

    Because HMRC sees crypto as a capital asset, when you dispose of a capital asset – you will have to pay Capital Gains Tax. Disposals of crypto include:

    • Selling crypto for GBP or another fiat currency.
    • Trading crypto for crypto
    • Spending crypto on goods and services.
    • Gifting crypto – unless it’s to your spouse or civil partner.

    So anytime you sell, trade, spend or gift crypto in the UK – you’ll pay Capital Gains Taxs a result. But it should be noted you won’t pay tax on the entire proceeds when you make a disposal. You’ll only pay tax on crypto gains, so whenever you’ve made a profit. Unlike many other countries, the UK doesn’t have a short-term and long-term Capital Gains Tax rate. All capital gains are taxed under the same rates. The amount of Capital Gains Tax you’ll pay depends on how much you earn. You can calculate how much tax you owe from crypto gains by using our Crypto Tax Calculator. Learn more about our Capital Gains Accountancy Service.

  • Crypto and Income Tax

    There are cases where crypto is treated as income and thus attracts Income Tax. Crypto transactions that are classified as income are taxed at your regular Income Tax band. In some instances, you’ll also need to make National Insurance contributions on income from crypto too.

    In the UK, crypto is taxed as Income when it comes from:

    • Getting paid in crypto – this is also subject to National Insurance
    • Staking
    • Mining tokens
    • Airdrops

    In general, Income Tax will only apply to ‘returns’ from activities, so rewards from staking, yield farming, lending and more could be considered income and subject to Income Tax. HMRC say it’s likely to be considered income if:

    • The return to be received has been agreed
    • If the return is paid by the borrower
    • If the return is paid periodically throughout the period of lending/staking.

    In summary – any time you’re earning new tokens as a result of an investment activity, this is likely to be seen as Income and subject to Income Tax.

  • Crypto and Inheritance Tax

    HMRC considers cryptocurrency as property for Inheritance Tax (IHT) purposes. Therefore, it will be subject to the standard IHT rate of 40% (if your estate exceeds the £325,000 tax-free threshold). Unfortunately, cryptocurrency doesn’t currently have the same assurances as other types of assets for inheritance tax. Tax is calculated upon an individual’s death, but because cryptoassets are volatile and their value can fluctuate so quickly, there is a risk that the value will increase or decrease resulting in more or less tax to pay at the point of disposal. With other types of assets, executors can claim a rebate on some of this value; however, this isn’t currently available for cryptoassets. So what can you do to ensure the process of transferring your cryptoassets to your next-of-kin runs more smoothly? And is there anything you can do to minimise your IHT bill? Learn more about our Inheritance Tax Accounting Service.

  • Do You Get Tax Breaks With Crypto in the UK?

    UK crypto investors can pay less tax on crypto by making the most of tax breaks.

    Personal Income Tax Allowance

    Your first £12,570 of income in the UK is tax free for the 2021/2022 tax year. This matters for your crypto because you subtract this amount when calculating what Income Tax band you’re in. Please note you do not get a Personal Income Tax Allowance if you earn more than £125,140 a year. At MJ Kane, we are experts in Personal Tax Accountancy. Learn more about our extensive services online.

    Trading and Property Allowance

    £1,000 of income from trading or property is tax free thanks to the Trading and Property Allowance. If you’ve got income from both, you can get £2,000 tax free.

    Capital Gains Tax Free Allowance

    The UK has a Capital Gains Tax Free Allowance of £12,300. So you’ll only pay Capital Gains Tax after you’ve already gone over this allowance. Provided you make no more than £12,300 from capital gains in a single financial year, you’ll pay no Capital Gains Tax.

  • Why You Should Seek Crypto Tax Advice

    The most proactive, efficient and sensible way to handle your crypto tax is to speak to your accountant! MJ Kane have the knowledge and expertise to make recommendations based on your individual estate, crypto portfolio and preferences.

    You can find out more about our crypto tax accountants services, or by arranging a consultation with our team on the form below.

    Alternatively, for urgent queries please call us at:

    Tel: 028 9335 0290

  • What Should I Expect With MJ Kane’s Initial Crypto Tax Consultation

    At M J Kane, we can provide assistance with ensuring that crypto transactions are tax efficient and advising on the implications of crypto asset activities.

  • What is included in my 15-minute advisory phone call

    During your advisory phone call you will be in a position to ask one of our Crypto Tax Specialists any questions you may have regarding tax advice and crypto currency.
    You will be provided with bespoke advice unique to your circumstances.
    The call will include advice on tax planning and tax saving to ensure that you get the best savings out of your investment.
    You will be provided with a report based on the phone call detailing the advice our specialist recommends.
    This call will be more than a consultation and will provide you with bespoke, exact tax advice unique to your situation.
    You can book a 15-minute conversation with one of our Experts now!

  • Do I need to report my Cryptocurrency on my taxes

    Yes, your cryptocurrency is taxable. HMRC considers cryptocurrency holdings to be a taxable income. The rate your currency income is taxed on will vary depending on the way you receive the income.

  • Are paper gains taxable?

    Unrealized gains. Gains that are “on paper” only are called “unrealized gains.” For example, if you bought a virtual asset for £10 and it’s now worth £12, you have an unrealized gain of £2. You won’t pay any taxes until you sell the asset or transfer it.

  • Can HMRC track Crypto?

    HMRC may investigate your tax affairs if you have invested in cryptoassets, cryptocurrency, and virtual currencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Monero (XMR), Zcash (ZEC) and Ripple (XRP).

  • Are There Crypto Tax Reporting Softwares and Tools in the UK

    There are numerous cryptocurrency tax softwares available in the UK and accurately consider UK tax consideration. Koinly Crypto Tax Software is strong consideration for being one of the most user friendly and easy to use crypto reporting tools.

  • Other Crypto Resources You Might Be Interested In

    At MJ Kane, we pride ourselves in the years of industrial expertise within the crypto sphere and UK tax. Delivering award winning services to thousands of businesses and individuals across the globe. Learn more about other crypto tax guides and services.

Why MJ Kane As Your Crypto Accountants

Award winning services

8000 plus satisfied clients

100+ years combined industry experience

30+ Countries covered

Fixed Fee Service

Tax efficiency focused

Meet the Team

Meet the Senior Management Team

Michael Kane

Founder | Managing Partner

SME Tax Compliance | Tax Planning | Business Development

FCCA Qualified

MJ Kane

Director | Senior Accountant

SME Tax Compliance | Crypto Taxation Compliance | Business Structuring

ACCA Qualified | BSc Hons Accounting

Jonathon Greenaway

Director | Senior Accountant

SME Tax Compliance | Property Capital Gains | Inheritance Tax

ACCA Qualified | BSc Hons Business Studies

Need help with Accountancy? Call us today: 028 9335 0290

View our latest news & insights

4 December 2023
The Rise of Side Hustles Amidst the Cost-of-Living Crisis In today’s ever taxing world, where the cost of living s...
The Rise of Side Hustles Amidst the Cost-of-Living Crisis In today’s ever taxing world, where the cost of living seems to always be on the rise, it’s no surprise that nearly a third of UK workers are exploring creative...
23 November 2023
Let’s dive into the Chancellor’s Autumn Statement for 2023, a plan designed to bolster a stronger, more resi...
Let’s dive into the Chancellor’s Autumn Statement for 2023, a plan designed to bolster a stronger, more resilient economy. The big news in this Autumn Statement? A whopping £20 billion yearly boost in business investm...

Get in Touch

If you have an enquiry, please submit an online enquiry below or call us and our Client Services team will be happy to assist you.