Cryptoasset disclosures
Acting on your behalf to ensure all the appropriate steps are taken to mitigate penalties.
The taxation of cryptoassets is complex, and HMRC is taking great interest in this area.
Cryptoasset ownership has grown in popularity from what was originally a niche technology into a major alternative investment, with a wide spectrum of investor types. According to research from the Financial Conduct Authority, around 12% of UK adults owned crypto in 2024, up from 4% in 2021.
Users of cryptoassets will need to ensure that their UK tax and reporting obligations are up-to-date.
We can provide specialist advice and guide you through any disclosure you may need to make.
How are cryptoassets taxed?
HMRC published their Cryptoassets Manual on 30 March 2021 after several years of consultation. The manuals represent HMRC’s interpretation of current legislation and case law for internal staff use, however there is not currently any UK legislation regarding cryptoassets as it is an emerging and complex technology. Professional commentators have already challenged HMRC’s approach, so these uncertainties will inevitably lead to disputes between taxpayers and HMRC.
Capital Gains Tax
If you swap or sell cryptoassets as personal investments, Capital Gains Tax may be owed. Capital gains/losses would be calculated in a similar way to investing in shares.
Income Tax
Income tax could be owed on trading profits from cryptoassets. Trading status is fact dependent and there is great potential for disagreement given the different tax treatments.
If you swap or sell cryptoassets as personal investments, Capital Gains Tax may be owed. Capital gains/losses would be calculated in a similar way to investing in shares.
Income tax could be owed on trading profits from cryptoassets. Trading status is fact dependent and there is great potential for disagreement given the different tax treatments.
Inheritance Tax
When cryptoassets are gifted during a person's lifetime or after their death, Inheritance Tax will need to be considered.
Other taxes
A variety of taxes including Corporation Tax and Stamp Taxes can apply to businesses that use or invest in cryptoassets.
When cryptoassets are gifted during a person's lifetime or after their death, Inheritance Tax will need to be considered.
A variety of taxes including Corporation Tax and Stamp Taxes can apply to businesses that use or invest in cryptoassets.
As an emerging and complex class of assets, there is not currently any UK legislation regarding cryptoassets upon which HMRC has formed its views, and professional commentators have already challenged some elements of HMRC’s approach.
Despite this, ownership of cryptoassets is becoming more common with investing seen as completely legitimate. As testament to this, in November 2024, the Financial Conduct Authority (FCA) published a roadmap regarding the UK’s crypto regulation regime.
This rise in investment and uncertainties surrounding legislation will undoubtedly lead to disputes between taxpayers and HMRC in the future.
What data can HMRC access?
HMRC has many statutory information powers to request information from taxpayers and third parties such as traditional financial institutions.
In addition, HMRC has also started approaching crypto exchanges. In Autumn 2020, a popular exchange reportedly advised its users that it would be providing details to HMRC about customers who had received cash payments over £5,000 during the tax year.
In November 2023, the international Crypto-Asset Reporting Framework was agreed between almost 50 countries including the UK.
From January 2026, the Organisation for Economic Development’s (OECD) announced the Cryptoasset Reporting Framework (CARF) will be introduced, which means that cryptoasset service providers will need to send user and transactions information directly to HMRC.
All of this will give HMRC a wealth of data regarding cryptoassets, and it will only be a matter of time before they start to approach taxpayers with what they’ve found.
Taxpayers need to take reasonable care to ensure that cryptoassets are accurately reported and taxed
The UK tax system is based on taxpayers self-assessing the amount of tax owed, after which HMRC may ask questions within a strict enquiry window. It is likely that HMRC will be taking a keen interest in taxpayers who have reported cryptoasset income or gains on their returns.
Taxpayers are obliged to maintain adequate records, which HMRC may request to see in order to verify the accuracy of the return. Adequate records may include cryptoasset holdings and exchanges used, transaction ledgers, valuations, public and private keys, and bank statements showing deposits/withdrawals in traditional currency.
If a return is found to be inaccurate, HMRC can assess penalties and charge interest on any unpaid tax, which may significantly increase the overall liability for the taxpayer.
Get in touch
You can email or complete our booking from to arrange a free confidential consultation.
How we can help
Review the background with you to ensure all issues are being resolved.
Advise on the most appropriate route of disclosure, whether that is the cryptoasset disclosure facility or an alternative route.
Produce a bespoke disclosure report to reduce the possibility of follow up questions.
Liaise with exchanges and other third parties to assist with obtaining the relevant data.
Calculate the tax due while considering all legitimate claims for tax relief and allowances.
Act as a barrier between you and HMRC so that you won’t need to speak to them directly.
Advise and safeguard you if HMRC is overstepping the mark.
Advise you on the likely penalty position and consider all mitigating factors to minimise the penalties.
We investigate subjects and entities to trace funds and recover assets, including cryptoassets.
Working with our Forensic Services team, we use advanced tools like blockchain analytics and machine learning to uncover hidden transactions, mitigate fraud risks, and address tax implications where traditional asset-tracing methods fall short.
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Our experienced and award-winning Tax Resolutions team can help you to resolve any tax issues relating to cryptoassets to give you peace of mind going forward.
