A: For most individuals selling Bitcoin and other cryptocurrency held as investments will not amount to a trade and so will be subject to Capital Gains Tax when they are sold.
The rules for calculating the gain are very similar to those for selling shares and follows the same matching and pooling rules.
On the disposal of assets, the assets are first matched with acquisitions:
- made on the same day, then
- made in the next 30 days on a first-in first-out basis
This means that you are treated as having sold any assets acquired on the same day as the disposal first, then any bought in the previous 30 days using the appropriate acquisition cost. See
CRYPTO22200 - Cryptoassets Manual - HMRC internal manual
For any cryptocurrency not matched in this way the allowable expenditure enters a pool and will create a running total of expenditure to be used on future disposals from the pool. Examples of how this works in practice can be found at CG51590 - Capital Gains Manual - HMRC internal manual
These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.
About Markel Tax
Markel Tax offers expert advice on UK tax and VAT via its helpline and provides monthly FAQs with questions and answers on common tax issues for businesses and practitioners.
