{"id":23449,"date":"2023-01-26T17:46:02","date_gmt":"2023-01-26T17:46:02","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=23449"},"modified":"2025-09-11T15:02:36","modified_gmt":"2025-09-11T14:02:36","slug":"reducing-your-tax-bill-with-crypto-losses","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/blog\/reducing-your-tax-bill-with-crypto-losses\/","title":{"rendered":"Reducing your tax bill with crypto losses"},"content":{"rendered":"\n

It\u2019s been a rough year for crypto investors. From platforms like Celsius and FTX going under, to the NFT hype train running out of steam – the crypto winter has arrived. But those losses might just offer a silver lining when it comes to your taxes. (Words you never thought you\u2019d hear, right?) <\/p>\n\n\n\n

We\u2019ve teamed up with our crypto tax partner Koinly<\/a> to give you the inside scoop.<\/p>\n\n\n\n

The crypto tax basics<\/h2>\n\n\n\n

Whenever you dispose of crypto by selling, swapping, spending or gifting it, your gains may be subject to Capital Gains Tax (CGT). But – another silver lining – there\u2019s no CGT to pay if you\u2019re gifting crypto to your spouse or civil partner.<\/p>\n\n\n\n

HMRC also doesn\u2019t tax all your capital gains – you actually get a tax-free CGT allowance for each tax year.<\/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, as many investors know – especially crypto investors – not all investments end in a gain. Sadly, some result in a loss. This is what\u2019s known as a capital loss. And while nobody likes losses, you can actually use them to cut your tax bill. How? By offsetting losses against gains. Don\u2019t worry, we\u2019ll explain exactly what we mean below.<\/p>\n\n\n\n

The CGT allowance<\/strong><\/p>\n\n\n\n

In the 2022 Autumn Budget, the Chancellor announced that the CGT allowance was being cut in the 2023\/24 and 2024\/2025 tax years. From April 2023, the tax-free allowance went from \u00a312,300 to \u00a36,000, and from April 2024, down to \u00a33,000.<\/p>\n\n\n\n

How do capital losses work?<\/h2>\n\n\n\n

There are some important things you need to know about capital losses.<\/p>\n\n\n\n

First up, you need to \u201crealise\u201d losses in order to offset them. That means you need to dispose of your crypto by selling, swapping, spending or gifting it (not to your spouse\/civil partner – that\u2019s tax free). Before this point, you have an \u201cunrealised loss\u201d.<\/p>\n\n\n\n

Basically, you can\u2019t count your crypto as a loss if you still own it. Once it\u2019s disposed of, it\u2019s officially a loss – and from this point, you can use it to your tax-advantage.<\/p>\n\n\n\n

Am I limited to a certain amount of losses?<\/h2>\n\n\n\n

There\u2019s no limit to the amount of losses you can offset against your gains. You can use your losses to bring yourself back under your CGT tax-free allowance, or closer to it than you were before, so you have less tax to pay<\/p>\n\n\n\n

If you\u2019re thinking to yourself, \u201cwhat gains?\u201d – then there\u2019s good news!  If you have no gains to offset your losses against, you can carry losses forward to offset against gains in the future.  But <\/strong>there\u2019s a catch. You need to register your losses with HMRC within four years. Once you do that, you can carry them forward indefinitely until they\u2019re used up. You can register losses with HMRC via your Self Assessment tax return <\/p>\n\n\n\n

Same-day and 30-day CGT rules<\/h2>\n\n\n\n

Finally, there are some important rules that prevent investors from creating artificial (or paper) losses, known as the same-day and 30-day CGT rules<\/a>. These rules prevent investors from deliberately selling assets at a loss and then buying them back in a short time frame to gain a tax advantage.<\/p>\n\n\n<\/div> \n\n

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Pro tip? Tax loss harvesting<\/h2>\n

Tax-loss harvesting is when you use the loss from one asset to bring down the amount of CGT you need to pay on another. In other words, it\u2019s selling your assets for a loss to offset the amount of CGT due on the sale of other assets at a profit.<\/p>\n

Most investors opt to use crypto portfolio trackers, like our partner Koinly, to do this. Koinly lets you see your overall portfolio performance, including both your realised and unrealised gains and losses, plus your individual holdings performance. This includes your ROI, so you can easily figure out which losses to harvest to optimise your tax position.<\/p>\n\n <\/div>\n<\/div> \n\n

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What if I can\u2019t realise my loss?<\/h2>\n\n\n\n

There are some scenarios where realising your loss is easier said than done, including:<\/p>\n\n\n\n