Section 104 Holding. Calculate the average cost for all cryptoassets bought before the disposal date. To find the cost basis of the crypto you disposed of, multiply the average cost with the number of cryptoassets\/coins sold (similar to the average cost basis method). HMRC refers to this as a single pool in your Section 104 Holding.<\/li><\/ul><\/li><\/ul>These complicated rules were invented to stop crypto investors from manipulating their gains by selling and rebuying crypto assets to create an artificial loss.<\/p>
Creating tax documents<\/h4> Most crypto tax software can help you complete the necessary tax forms at the end of the tax year. In the UK, you’ll need to report crypto income in a self-assessment tax return (SA100) and record any capital gains or losses using a capital gains summary (SA108).<\/p>
Integration with HMRC<\/h4> Crypto tax software doesn’t currently integrate directly with HMRC, but the best platforms will help you automatically fill in your tax forms.<\/p>
Investors should watch out because HMRC is becoming more active in chasing up people who may have crypto tax liabilities. They currently ask for information from several crypto platforms including Coinbase, and it is likely that HMRC will ask all the major crypto platforms to share customer information in the future.<\/p>
Security<\/h4> Most platforms provide detailed information on their security features, like 256-bit encryption and employee vetting.<\/p>
Check out online customer reviews to see if the crypto tax company you’re considering has a good reputation. You can also search google to see if a company has had any recent breaches or hacks.<\/p>
Customer support<\/h4> Many tax software companies offer 24-hour support and live chat. They also provide online guides and resources to help you understand more about how crypto tax works.<\/p>
What taxes does crypto tax software cover?<\/h3> There are several types of tax that are relevant to crypto. We’ve given a brief overview of each one here.<\/p>
Capital gains tax<\/h4> Capital gains tax (CGT) is a tax you have to pay on any profit or gain you make from buying and selling taxable assets. Each year, you’ll get an annual allowance (\u00a33,000 in the tax year 2026\/2027).<\/p>
For most assets, any gains over the annual allowance will be taxed at 20%. Take a look at our detailed guide to CGT for more information.<\/p>
Crypto assets are subject to CGT if you make more than the allowance in gains. Any CGT on cryptoassets are added together with other gains to give you a total for the tax year.<\/p>
You may have a potential capital gain if you sell your tokens, exchange tokens for a different type of crypto asset, use your tokens to pay for goods or services or give away your tokens to another person.<\/p>
If you make total capital gains of more than the annual allowance (\u00a33,000 in 2026\/2027), including gains on crypto assets, then you’ll have to complete a capital gains summary (SA108) detailing capital gains or losses during the year.<\/p>
2022 HMRC guidance on staking<\/h4> Crypto lending and staking is a complex area and HMRC rules are constantly evolving.<\/p>
Recently published HMRC guidance requires investors to treat crypto staking as a disposal for tax purposes at the moment the crypto asset leaves the user’s wallet.<\/p>
CryptoUK, the trade association for the crypto assets industry, interprets this to mean that when a token is lent or staked into a platform or protocol, it may be classified as a disposal by the HMRC for tax purposes “at the moment the token leaves the user’s wallet.”<\/p>
Using crypto tax software will help you keep up top of the current HMRC rules and make sure you’re reporting your crypto income and capital gains correctly.<\/p>
Income tax on crypto assets<\/h4> If you make more than the allowance \u2013 \u00a31,000 in the tax year 2021-22 \u2013 from mining and staking crypto assets, you’ll need to pay income tax and complete a self-assessment tax return. It’s treated like other types of income, so you’ll pay 20% income tax if you’re a basic rate taxpayer and 40% to 45% if you’re a higher rate taxpayer.<\/p>
Bottom line<\/h3> Using crypto tax software can help simplify keeping records of your crypto asset transactions. It will keep secure records of all your crypto transactions by integrating directly with your crypto trading platform.<\/p>
It will also save you a headache at the end of the tax year when you need to fill in your tax return. That’s because you’ll be able to automatically fill in the required HMRC forms. You can also rest easy that you’re complying with all the complicated HMRC rules on crypto tax.<\/p>
Frequently asked questions<\/h3>\n \n
\n \n What is crypto share pooling?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
Crypto share pooling is where you pool similar types of crypto assets together to work out your capital gains and losses. Crypto tax software can help you do this automatically to save you time and hassle at the end of the tax year.<\/div>\n <\/div>\n<\/li>
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\n \n How much does crypto tax software cost?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
Crypto tax software varies in cost depending on the provider and service level you choose. Most crypto tax software starts at around $50 (about \u00a337) per month.<\/div>\n <\/div>\n<\/li>
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\n \n What happens if you're paid in cryptocurrency?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
If you’re paid in cryptocurrency, then it’s treated like any other pay. You’ll have to pay income tax and National Insurance on the value of the crypto assets received as payment.<\/div>\n <\/div>\n<\/li>
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\n \n Do I need crypto tax software if my total capital gains are under the annual allowance?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
If your total capital gains are under the annual allowance (\u00a33,000 in the tax year 2026\/2027), you may still need to report gains if both of the following apply:<\/p>
The total amount you sold the assets for was more than 4 times your allowance.<\/li> You’re registered for self-assessment.<\/li><\/ul><\/li><\/ul><\/li><\/ul>You will also need to report your crypto income if you earn more than \u00a31,000 through crypto mining or staking.<\/p>
Of course, you don’t need to use crypto tax software to report your capital gains, but it does make working out your gains a lot easier!<\/div>\n <\/div>\n<\/li><\/ul>