Guide
What counts as a crypto disposal in the UK
Updated
Almost every underpaid crypto tax bill starts here, with a transaction that did not feel like a sale because no pounds moved.
The four things HMRC lists
Selling tokens. Exchanging them for a different type of cryptoasset. Using them to pay for goods or services. And giving them away, other than to a spouse or civil partner or to charity.
The second and third are the ones people miss, and they are the most common transactions an active holder makes.
Token to token is the big one
Swapping one token for another is a disposal of the first, and it is taxed on the difference between the pooled cost of what you gave up and its value at the moment of the trade.
No sterling was involved, which is precisely the problem: a value has to be established for the disposal anyway. Somebody who has made two thousand swaps has made two thousand disposals.
Spending tokens is a disposal too
Paying for goods or services with tokens disposes of them at their value at that moment.
This surprises people, and it is worth noting before rather than after, because it means using an appreciated holding to buy something has a tax consequence that a bank transfer would not.
Gifts, and the exceptions
Giving tokens away is a disposal, with exceptions for a spouse or civil partner and for gifts to charity.
That exception list is short and specific. A transfer to a family member outside it is a disposal at market value even though nothing was received.
What this means for choosing an adviser
The single most useful question to put to a prospective accountant is which of your transactions are disposals that you had not counted as disposals.
Somebody who has done this work answers immediately and specifically. Somebody who has not will treat your exchange history as a list of purchases and sales.