Example: How HMRC’s crypto tax rules work in practice
Sadie owns crypto worth £50,000 that she bought for £30,000. They’re all the same type of crypto. She also has a mining profit of £2,000 in the same tax year (her mining income minus her mining expenses). She sells all her crypto and realises a gain of £20,000. She has a chargeable gain of £7,700 (£20,000 minus £12,300 annual allowance for 2021-22). She is a higher-rate tax payer so she owes £1,540 in tax (£7,700 at 20%). She fills in a SA108 capital gains summary as part of her self-assessment. HMRC sends her a letter with a payment reference number, telling her how to pay. She also declares her £2,000 mining profit on her tax return and pays income tax of £800 (£2,000 at 40%) on this profit.