It is not always obvious to taxpayers that they may have triggered a taxable gain on disposal of a cryptoasset. Often, they assume that it only arises when they convert the digital asset back into traditional currency. However, a gain can arise on disposal where the person: 

• exchanges one cryptoasset for another;
• uses a cryptoasset to buy goods or services; or
• gives away a cryptoasset to a person who is not their spouse or civil partner. 

The letter also reminds taxpayers that they may have income tax and national insurance contributions to pay, depending on the nature of their cryptoasset activities (such as lending, staking and mining).  

If the person has additional tax to pay, they should contact HMRC using the details in the letter. If they have submitted a tax return, they should amend that return. Generally, a person can amend their return up to 12 months from the deadline for submitting the return. If this date has passed, or if the person did not submit a return, they should use the cryptoasset disclosure service.   

HMRC will charge interest on any tax paid late and may also charge penalties.  

If the person is satisfied that they do not have additional tax to pay, they should contact HMRC and explain why.  

In all cases, the person should take the necessary action within 60 days of the date of the letter.  

Further information: 

HMRC has provided an example letter, which explains where to find guidance from HMRC on the taxation of cryptoassets.  

Earlier this year, ICAEW’s Tax Faculty published guidance for individuals and businesses: 

• TAXguide 01/2024: Taxation of cryptoassets for individuals 
• TAXguide 02/2024: Taxation of cryptoassets for businesses 

HMRC’s guidance includes: 

• Check if you need to pay tax when you sell cryptoassets
• Check if you need to pay tax when you receive cryptoassets
• Cryptoassets Manual