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.

HMRC has released guidance confirming that if an asset now has little or no value, an individual can submit a negligible value claim to HMRC to crystallise (‘bank’) a capital loss for cryptoassets they still own. 

You have to demonstrate that the asset had value and has later become of negligible value while you own it. 

This claim and the loss resulting from the claim need to be reported in the Self Assessment Tax Return. You are deemed to dispose of the cryptoasset for its current market value, therefore resulting in a capital loss if the allowable costs are more than this. 

This loss can be used to reduce gains in the same tax year or be carried forwards to reduce future capital gains. An example of this could be a cryptoasset that the developers have stopped working on and is seemingly a “dead project”.

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