Background
When an investor realises the value of a crypto asset and makes a profit they may be required to report this on their Self Assessment tax return and pay Capital Gains Tax (‘CGT’) by the 31 January following the end of the tax year.
From 1 January 2026, UK crypto holders will have to provide personal details to crypto service providers in an effort to crack down on tax evasion or face penalties of up to £300 from HM Revenue & Customs (HMRC).
Detail
Where the profits from the realisation of a crypto asset, including crypto currencies such as Bitcoin exceed the annual allowance for CGT, currently £3,000, or take an individual over this limit when included with their other capital gains and losses for the tax year, then the tax payer must report the gains and pay any associated CGT by 31 January following the end of the tax year. Income tax and national insurance could apply to crypto assets received from employment, mining, staking or lending activities.
New regulations are being introduced with effect from 1 January 2026 in the UK which are part of the Organisation for Economic Cooperation and Development (OECD) Cryptoasset Reporting Framework (CARF) and require crypto platforms to share detailed information with tax authorities of clients’ crypto transactions. CARF will provide for the automatic exchange of cryptoasset information on an annual basis.
In June 2025, regulations were introduced requiring reporting cryptoasset service providers (RCASPs) to collect and report information on cryptoasset users who are resident in the UK or in another jurisdiction that is signed up to CARF. So far the CARF has being adopted by 52 countries with the UK one of the first countries to roll out the new rules. The first report, which will cover the period from 1 January 2026 to 31 December 2026, must be submitted to HMRC by 31 May 2027. HMRC has recently published guidance to help RCASPs and cryptoasset users prepare for the changes.
In addition, HMRC is already requiring full disclosure on self assessment forms for the 2024/25 tax year, so taxpayers who own crypto such as Bitcoin, Ethereum or Dogecoin, will have to include any crypto gains or income in their tax returns with the 2024/25 return including new boxes for reporting cryptoasset gains and losses.
HMRC will use the information from CARF to link the person’s cryptoasset activities to their tax records to ensure they pay the correct amount of tax. A penalty of up to £300 may be charged where the person fails to provide the information or gives inaccurate information.
The new measures will mean that rather than just having details of disposals in limited circumstances, HMRC will have full details of UK users of crypto including all transactions and details of their assets held.
From 1 January 2026, crypto service providers, platforms and trading exchange must collect and report to HMRC:
- The name, address, and date of birth of individual crypto investor;
- the individual’s tax residence;
- their national insurance number or tax reference; and
- details of crypto transactions, including the value, type of cryptoasset, type of transaction and number of units.
Crypto values have increased significantly since the election of president Donald Trump, who has come out in strong support of the sector, in a shift from previous US policy. This increase in value could well mean many more individuals with need to carefully consider if they have any transactions that will require disclosure to HMRC.
If you have any questions regarding the reporting of gains or losses on crypto assets or any of the points raised above, please speak to our Tax Director, Jenny Marks.
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