{"id":21834,"date":"2022-11-22T16:00:57","date_gmt":"2022-11-22T16:00:57","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=21834"},"modified":"2025-09-12T09:30:30","modified_gmt":"2025-09-12T08:30:30","slug":"tax-guide-to-buying-crypto-uk","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/investor-capital-gains-tax-returns\/tax-guide-to-buying-crypto-uk\/","title":{"rendered":"Tax guide to buying crypto (UK)"},"content":{"rendered":"\n

If you\u2019re thinking about buying crypto, you\u2019re not alone! But before diving into the ultra-modern world of digital currency, here is your tax guide to buying crypto in the UK.<\/p>\n\n\n\n

Wait, is buying crypto taxable (UK)?<\/h2>\n\n\n\n

Buying crypto alone doesn\u2019t automatically mean you\u2019ll have to pay tax, but there are some circumstances where it can catch the eye of Providence<\/s> HMRC.<\/p>\n\n\n\n

An example of this is regularly buying and selling crypto for profit. This makes you a trader in the eyes of HMRC and you\u2019ll be liable for income tax. <\/p>\n\n\n\n

You\u2019ll be taxed according to the current income tax rates.<\/p>\n\n\n<\/div> \n\n

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The <\/span>income tax<\/b> rates in the 2025\/26 tax year \ud83d\udc47<\/span><\/p>\n\n\n\n\n\n\n\n
Income<\/strong><\/td>\nTax rate<\/strong><\/td>\nTax band<\/strong><\/td>\n<\/tr>\n
Up to \u00a312,570<\/span><\/td>\n0%<\/span><\/td>\nPersonal allowance<\/span><\/td>\n<\/tr>\n
\u00a312,571 to \u00a350,270<\/span><\/td>\n20%<\/span><\/td>\nBasic rate<\/span><\/td>\n<\/tr>\n
\u00a350,271 to \u00a3125,140<\/span><\/td>\n40%<\/span><\/td>\nHigher rate<\/span><\/td>\n<\/tr>\n
over \u00a3125,141<\/span><\/td>\n45%<\/span><\/td>\nAdditional rate<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n <\/div>\n<\/div> \n\n
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But not everyone who buys and sells crypto will be considered a trader. If you\u2019re trading often and these trades make up most of your income, well, congrats! You officially get to call yourself a trader \u2714\ufe0f<\/p>\n\n\n\n

\u2026 but you\u2019ll also have to pay income tax.<\/p>\n\n\n\n

Here’s a little visual to get you thinking and then we’ll get into the details:<\/p>\n\n\n

\"crypto<\/div>\n\n\n

Do you have to report crypto you bought but didn\u2019t sell?<\/h2>\n\n\n\n

Usually, you\u2019ll only have to report crypto that you sold for profit over the current CGT threshold. You pay capital gains tax<\/a> on that profit. <\/p>\n\n\n<\/div> \n\n

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Capital gains tax<\/b> rates in the 2025\/26 tax year. It\u2019s paid on profits over the \u00a33,000 CGT allowance \ud83d\udc47<\/span><\/p>\n\n\n\n\n\n\n\n
Type of asset<\/b><\/td>\nBasic rate<\/b><\/td>\nHigher rate<\/b><\/td>\n<\/tr>\n
Shares<\/span><\/td>\n10%<\/span><\/td>\n20%<\/span><\/td>\n<\/tr>\n
Residential property<\/span><\/td>\n18%<\/span><\/td>\n24%<\/span><\/td>\n<\/tr>\n
Bitcoin\/cryptocurrency<\/span><\/td>\n10%<\/span><\/td>\n20%<\/span><\/td>\n<\/tr>\n
Other<\/span><\/td>\n10%<\/span><\/td>\n20%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n <\/div>\n<\/div> \n\n
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But, there are some cases where you report your crypto income even if you decide to hold onto it. <\/p>\n\n\n\n

One example is if your employer pays your wages fully or partially in crypto. In this case, your crypto will be treated as ordinary income (like GBP) and taxed at the regular income tax rates.<\/p>\n\n\n\n

Another example is mining crypto. Although you don\u2019t actually buy<\/em> crypto when mining, it\u2019s another way to possess crypto – and it has to be reported to HMRC even if you don\u2019t decide to sell.<\/p>\n\n\n\n

What on earth is mining crypto? \ud83d\ude05<\/h2>\n\n\n\n

Basically, crypto mining is the <\/em>way to get new coins into circulation for some cryptocurrencies. Kind of like how the bank of England prints \u00a320 notes\ud83d\udcb7 But also not like the Bank of England because for some coins, like Bitcoin, there\u2019s only a finite number in existence… <\/p>\n\n\n\n

But anyway, we digress.<\/p>\n\n\n\n

Once you\u2019ve solved potentially the most difficult mathematical problems known to man, crypto is generated and can be distributed (the miner also may be rewarded with some coins).<\/p>\n\n\n<\/div> \n\n

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Fun fact: the term was inspired by gold mining, but funnily enough, there are no excavators involved. \ud83d\udee0\ufe0f Just an insane level of computing powers!<\/p>\n\n <\/div>\n<\/div> \n\n

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The two types of crypto miners<\/h2>\n\n\n\n