The tax treatment of cryptoassets can be complex and as the market develops so do the directives issued by HM Revenue & Customs (HMRC). Despite more specific guidance from the government, there is still uncertainty as to how and when tax on cryptoasset investments should be paid.

Regardless of this being an evolving sector, the prevailing message is that accurate records must be kept and transactions reported to HMRC to ensure the right amount of tax is being paid.

Maintaining accurate records

It is the responsibility of the investor to maintain records for each cryptoasset transaction, particularly as the exchange may no longer be in existence when an individual completes a tax return.

Cryptoassets are digital assets and as such all records in a wallet should show balances and transactions, either in full or via reference to a public blockchain.

The records should also be kept and produced for any enquiries, as they are part of the audit trail from acquisition to disposal they are evidence of any gains made.

Records for each cryptoasset transaction must include:

  • The type of cryptoasset;
  • Date of the transaction;
  • If they were bought or sold;
  • Number of units involved;
  • Value of the transaction in pound sterling (as at the date of the transaction);
  • Cumulative total of the investment units held; and
  • Bank statements and wallet addresses, in case these are needed for an enquiry or review.

Reporting transactions on tax returns

A significant move from HMRC is to include a dedicated section within tax returns on gains arising from cryptoasset disposals. The significance of this is clear – individuals must report cryptoasset activity on their 2024-25 tax return and they need to ensure they have sufficient records to do so.

In addition, for the 2024-25 tax year onwards, the annual exempt amount for Capital Gains Tax (CGT) has been reduced to £3,000, meaning an increasing number of individuals will now be liable to this tax.

It is important to ensure the correct reporting of tax now to avoid any costly HMRC penalty charges later down the line.

How M+A Partners can help

Understanding your financial position and tax requirements is important when dealing with cryptoassets. Our team are here to help determine the correct tax treatment of any transactions involving cryptoassets, including calculating taxable gains or losses on cryptoassets. We will ensure any gains or losses are correctly recorded and any reliefs that can be claimed are applied.

For any help or guidance please get in touch with your usual M+A Partners contact or email