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What does HMRC classify as a taxable event for cryptocurrencies?
What does HMRC classify as a taxable event for cryptocurrencies?

Is trading crypto to crypto taxable? How much crypto tax do I owe? How is bitcoin taxed in the UK?

Daniel Howitt avatar
Written by Daniel Howitt
Updated over a week ago

Disclaimer: This article is intended as an informative piece. This is not accounting or tax advice. Please speak to a qualified tax professional about your specific circumstances before acting upon any of the information in this article.

Most transactions involving cryptoassets are subject to Capital Gains Tax (CGT). Individuals must calculate the gain or loss they have made whenever they “dispose” of cryptoassets. HMRC guidance confirms that disposals (taxable events) include:

  • Selling cryptoassets for fiat money (e.g. GBP, USD, EUR)

  • Exchanging cryptoassets for a different cryptoasset (e.g. exchanging Bitcoin to Ripple)

  • Using cryptoassets to pay for goods or services (e.g. paying fees on trades, paying fees on withdrawals and deposits of cryptoassets, buying a Starbucks Coffee or paying for accountancy services)

  • Giving away cryptoassets to another person (there are specific inter-spouse transfer rules for gifting cryptoassets to a spouse or civil partner)

Moving tokens between wallets owned by the same person does not result in a disposal. Recap allows users to calculate the taxable gain or loss as a result of all taxable events involving cryptocurrencies within a tax year, giving users clarity on their tax position in minutes.

Need to sort out your crypto taxes? Use Recap, the privacy focused cryptocurrency accounting software to calculate the taxable gain or loss on your cryptocurrency investments!

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