How to Report Crypto Losses to HMRC: Your Complete 2025/26 Guide

Last updated: January 2026

If you've experienced losses from your cryptocurrency investments, there's a silver lining: you can use these losses to reduce your tax bill. But the process of reporting crypto losses to HMRC comes with specific rules, deadlines, and documentation requirements that many investors miss.

This comprehensive guide walks you through everything you need to know about claiming crypto losses in the UK, from understanding what qualifies as a loss to filling out the exact forms and avoiding common pitfalls.

Quick Navigation

• Understanding Crypto Losses
• What Types of Losses Can You Claim?
• How to Calculate Your Losses
• Step-by-Step: Reporting to HMRC
• Negligible Value Claims Explained
• Common Mistakes to Avoid
• Important Deadlines

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Understanding Crypto Losses

What Counts as a Crypto Loss?

HMRC treats cryptocurrency as property for tax purposes, which means capital gains tax (CGT) rules apply.^[1] A capital loss happens when you sell (or "dispose of") cryptocurrency for less than you originally paid for it.

The basic formula:

Capital Loss = Sale Price - Original Purchase Price (Cost Basis) - Allowable Expenses

Realised vs. Unrealised Losses

This distinction is crucial and trips up many crypto investors:

Unrealised Losses (Cannot be claimed):

• Your crypto has dropped in value
• You still own the cryptocurrency
• It's just sitting in your wallet or exchange account
• Example: You bought Bitcoin at £50,000, and it's now worth £30,000, but you haven't sold it

Realised Losses (Can be claimed):

• You've actually sold, swapped, spent, or gifted the cryptocurrency
• The transaction has been completed and recorded
• Example: You bought Bitcoin at £50,000, sold it for £30,000, realising a £20,000 loss

Key point: Simply watching your portfolio value drop doesn't give you a tax loss. You must take action to "crystallise" (make real) that loss by disposing of the asset.^[2]

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What Types of Losses Can You Claim?

1. Trading Losses (Standard Disposals)

The most straightforward type of loss occurs from regular trading activity:

• Selling crypto for pounds sterling at a loss
• Swapping one cryptocurrency for another (e.g., trading Bitcoin for Ethereum at a loss)
• Spending crypto on goods or services where the crypto's value has fallen since purchase
• Gifting crypto to someone other than your spouse or civil partner^[3]

Example:
You bought 1 ETH for £3,000 in January 2024. In November 2024, you sold it for £2,000. This creates a realised capital loss of £1,000 that you can report to HMRC.

2. Lost or Stolen Crypto

This is where things get complicated. HMRC's position is strict: simply losing access to your crypto or having it stolen does NOT automatically count as a disposal for tax purposes.^[4]

Here's why: From HMRC's perspective, you still technically own the cryptocurrency. It still exists on the blockchain, even if you can't access it.

However, there are exceptions:

Lost Private Keys

If you've permanently lost your private keys and can prove there's absolutely no way to recover your crypto, you may be able to make a negligible value claim (more on this below). You'll need to demonstrate:

• You definitely owned the crypto at some point
• The private key is irretrievably lost
• There's no realistic prospect of recovery
• The crypto had value when you acquired it and became worthless while you owned it^[5]

Stolen Crypto

Similarly, if your crypto was stolen through hacking, scams, or theft, HMRC doesn't view this as a disposal because you theoretically still have legal ownership and the right to recover it.^[6]

BUT you may be able to make a negligible value claim if:

• You can prove the theft occurred (police reports, evidence of the hack)
• There's no realistic chance of recovery
• The perpetrator is unknown or unreachable
• The crypto has effectively become worthless to you

Special Case - You Never Received the Crypto:
If you paid for cryptocurrency but never actually received it (a scam at purchase), HMRC guidance suggests you may be able to claim a loss, though the rules here are murky and you should seek professional advice.^[7]

3. Exchange Bankruptcies & Frozen Funds

If your crypto is locked on a failed exchange (like FTX, Celsius, Voyager, Mt Gox), your options depend on the bankruptcy proceedings:

While Proceedings Are Ongoing:

• You typically cannot claim a loss yet
• The crypto may still have some recoverable value
• Bankruptcy administrators might return partial funds
• Making a negligible value claim could be premature^[8]

After Proceedings Conclude:

• If you receive nothing back, you can make a negligible value claim
• If you receive partial recovery, you can claim the loss on the unrecovered portion
• Keep all documentation about the bankruptcy and any distributions

Important: Because these situations often involve courts in other countries (like the US), HMRC guidance remains somewhat unclear. It's best to gather your documentation and consult a crypto tax specialist if you're affected.^[9]

4. Rug Pulls & Scam Tokens

A "rug pull" occurs when developers abandon a crypto project and disappear with investors' funds, leaving you holding worthless tokens.

The Problem:
You still physically possess the tokens (they're in your wallet), so HMRC doesn't consider this an automatic disposal. The tokens exist on the blockchain, even if they're now worthless.

The Solution - You Must Actively Dispose:

Here are your options to crystallise the loss:

1. Sell on an Exchange

   • If the token is still listed anywhere, sell it for whatever you can get (even pennies)
   • This creates a realised loss

2. Swap the Tokens

   • Use a DEX (decentralised exchange) or wallet feature
   • Swap your worthless tokens for another cryptocurrency
   • Even getting £1 worth of another coin crystallises the loss

3. Gift the Tokens

   • Transfer them to someone other than your spouse/civil partner
   • This counts as a disposal at market value (which is essentially zero)
   • Make sure to document the transfer

4. Send to a Burn Address

   • Many blockchains have "burn addresses" where crypto is permanently destroyed
   • Sending tokens here is a disposal that crystallises your loss
   • This is particularly useful for worthless NFTs or tokens that can't be traded^[10]

5. Negligible Value Claim (if blockchain halts)

   • In the rare case where the blockchain itself has stopped functioning
   • You may be able to make a negligible value claim without disposing

Remember: For a negligible value claim, you must claim the entire pool of that token, not just specific holdings.^[11]

5. Worthless NFTs

The same principles apply to NFTs (non-fungible tokens) that have become worthless:

To crystallise a loss:

• List and sell the NFT on a marketplace (even at a minimal price like £1)
• Gift it to someone other than your spouse
• Use the marketplace's "burn" feature if available
• Transfer to a burn address

Alternative: File a negligible value claim if you want to keep the NFT but claim the loss^[12]

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How to Calculate Your Losses

HMRC requires you to use the share pooling method for cryptocurrency, which is the same system used for shares and securities. This can get complex, especially if you've made multiple purchases and sales of the same crypto.^[13]

The Matching Rules (In Order)

When you dispose of cryptocurrency, HMRC wants you to match it against your purchases in this specific order:

1. Same-Day Rule

• Tokens bought and sold on the same day are matched together
• Use the actual purchase price from that day

2. 30-Day Rule (Bed & Breakfasting)

• If you buy the same crypto within 30 days after selling it, those tokens are matched
• This prevents "bed and breakfasting" (selling at a loss and immediately buying back)
• Applies to purchases made within the 30 days AFTER the sale

3. Section 104 Pool

• Everything else goes into your "pool"
• This is the average cost of all your holdings of that specific cryptocurrency
• The pool is calculated across all your wallets and exchanges
• When you sell, you use the average cost from the pool^[14]

Calculating Your Pool

Here's a simplified example:

Transaction History for Bitcoin:

• January 2024: Buy 1 BTC for £40,000
• March 2024: Buy 0.5 BTC for £22,000
• July 2024: Buy 0.3 BTC for £13,500

Your Section 104 Pool:

• Total BTC: 1 + 0.5 + 0.3 = 1.8 BTC
• Total Cost: £40,000 + £22,000 + £13,500 = £75,500
• Average Cost per BTC: £75,500 ÷ 1.8 = £41,944.44

When You Sell:

• November 2024: Sell 0.8 BTC for £28,000
• Cost basis for 0.8 BTC: 0.8 × £41,944.44 = £33,555.56
• Capital Loss: £28,000 - £33,555.56 = £5,555.56 loss

Allowable Costs

You can also deduct certain costs from your calculation:

• Transaction fees paid to exchanges
• Gas fees on blockchain networks
• Professional tax advice costs related to your crypto
• Costs of acquiring the crypto (if separate from the purchase price)

What you CANNOT deduct:

• Mining equipment or electricity costs (these are treated differently)
• Subscription fees for portfolio tracking tools
• General investment advice

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Step-by-Step: Reporting to HMRC

Now for the practical part: actually filing your losses with HMRC.

Do You Need to Register for Self Assessment?

You must register for Self Assessment if:

• Your total capital gains (before losses) exceed £3,000 in the tax year
• You want to claim losses to carry forward
• You have ANY crypto income over £1,000^[15]

Even if you've made an overall loss, if your gross gains before offset exceed £3,000, you need to file.

Registration Deadline: 5 October after the end of the tax year (so by 5 October 2025 for the 2024/25 tax year).

Timeline for 2024/25 Tax Year

• Tax Year: 6 April 2024 to 5 April 2025
• Self Assessment Opens: 6 April 2025
• Paper Return Deadline: 31 October 2025
• Online Return Deadline: 31 January 2026
• Payment Deadline: 31 January 2026^[16]

What You'll Need Before You Start

Gather these documents and information:

1. Complete Transaction History

   • Every crypto purchase with date, amount, and price
   • Every crypto sale with date, amount, and price
   • Every crypto-to-crypto swap
   • All fees paid

2. Cost Basis Calculations

   • Your Section 104 pools for each cryptocurrency
   • Average cost per coin
   • Calculations showing how you arrived at your losses

3. Supporting Evidence

   • Exchange statements
   • Blockchain transaction records
   • Screenshots of wallets
   • Evidence of transfers between your own wallets

4. Special Documentation (if applicable)

   • Negligible value claim documentation
   • Police reports for stolen crypto
   • Exchange bankruptcy information
   • Evidence of rug pulls or scams

Pro Tip: Most crypto investors use specialized crypto tax software (like Moonscape, Koinly, Recap, CryptoBooks, etc.) to handle the complex calculations. These tools connect to your exchanges and wallets, import transactions, and generate the reports you need.

The New Crypto Section (2024/25 Onwards)

Big news: starting with the 2024/25 tax year, HMRC introduced a dedicated cryptocurrency section in the Self Assessment form. Previously, crypto was lumped in with "Other property, assets and gains," but now it has its own boxes.^[17]

This makes reporting clearer but also means HMRC is paying more attention to crypto specifically.

Form SA100 - Self Assessment Tax Return

This is the main tax return form. Here's what you need to do:

Box 7 - Capital Gains:

• If you've made ANY crypto disposals during the tax year (even if they resulted in losses), tick "Yes"
• This indicates you need to complete form SA108

Boxes 17-18 - Crypto Income (if applicable):

• Only fill this in if you earned crypto as income (mining, staking, airdrops, payment for services)
• This is separate from capital gains
• Box 17: Total income received
• Box 18: Allowable expenses^[18]

Form SA108 - Capital Gains Summary

This is where the detailed crypto loss reporting happens. Form SA108 has multiple sections, but here's what matters for crypto:

NEW: Cryptoassets Section (Boxes 13.1-13.8)

Starting 2024/25, there's a dedicated section just for crypto:^[19]

Box 13.1 - Number of Disposals

• Enter the total number of separate crypto disposals you made
• Each sale, swap, or spending transaction counts as one disposal
• Example: If you made 50 crypto trades, enter "50"

Box 13.2 - Disposal Proceeds

• The total amount you received from selling/disposing of crypto
• Sum of all your sale prices in pounds sterling
• Include the GBP value of any crypto-to-crypto swaps

Box 13.3 - Allowable Costs

• Total cost basis of all the crypto you disposed of
• This includes purchase price plus fees
• Based on your Section 104 pool calculations

Box 13.4 - Gains in the Year (before losses)

• Total gains from crypto before applying any losses
• If you only have losses, enter "0"

Box 13.5 - Losses in the Year

• Total losses from crypto disposals this year
• Enter as a positive number (e.g., £5,000 not -£5,000)

Boxes 13.6 - 13.8:

• Usually only relevant if you've used HMRC's real-time Capital Gains Tax service
• Most people leave these blank

Supporting Documentation

With your SA108, you must attach:

• Detailed calculations showing how you arrived at your figures
• Working papers demonstrating you've followed HMRC's pooling rules
• A breakdown of proceeds and costs for each type of crypto
• Evidence of the Section 104 pools for each cryptocurrency^[20]

Crypto tax software will generate these supplementary documents for you.

"Losses and Adjustments" Section (Boxes 45-48)

This section is on page 3 of form SA108:

Box 45 - Losses from Previous Years

• If you claimed losses in previous tax years and are now using them to offset this year's gains
• Enter the amount of losses you're using this year

Box 46 - Income Losses Used Against Gains

• Usually not applicable for crypto
• Relevant only in very specific circumstances

Box 47 - Adjustment to Capital Gains Tax Payable

• Important for 2024/25 only due to the mid-year rate change
• If you had disposals before AND after 30 October 2024, you may need an adjustment
• HMRC provides an online calculator for this^[21]

Box 48 - Capital Losses Carried Forward

• Any losses not used this year that you want to carry forward
• Enter the total amount you're preserving for future years

Split Tax Year Adjustment (2024/25 Only)

The 2024/25 tax year is unusual because CGT rates changed mid-year on 30 October 2024:

Before 30 October 2024:

• Basic rate taxpayers: 10%
• Higher/additional rate: 20%

After 30 October 2024:

• Basic rate taxpayers: 18%
• Higher/additional rate: 24%^[22]

If you have gains (not losses) from both periods, you need to use HMRC's adjustment calculator to work out the correct tax.

For losses, this is less complex, but you should still track which losses occurred before and after the rate change for accurate reporting.

Filing Online: Step-by-Step

1. Log into Government Gateway

   • Go to gov.uk/log-in-file-self-assessment-tax-return
   • Use your User ID and password
   • If first time: create account using your UTR (Unique Taxpayer Reference)

2. Start Your 2024/25 Return

   • Select "Complete a tax return"
   • Choose the 2024/25 tax year
   • Select "Tailor your return"

3. Enable Crypto Sections

   • Under "Capital Gains," select "Yes, I disposed of chargeable assets"
   • If you have crypto income, select "Yes, I received other UK income"
   • These enable the SA108 and relevant income boxes

4. Complete SA100

   • Work through each section of the main form
   • Tick "Yes" in Box 7 for capital gains
   • Complete boxes 17-18 if you have crypto income

5. Complete SA108 - Cryptoassets Section

   • Navigate to Capital Gains → Cryptoassets
   • Fill in boxes 13.1 through 13.8 with your crypto figures
   • Upload or attach your supporting calculations

6. Complete "Losses and Adjustments"

   • Enter any brought-forward losses (Box 45)
   • Enter losses to carry forward (Box 48)
   • Apply any necessary adjustment (Box 47)

7. Review and Submit

   • Check HMRC's summary matches your expectations
   • Review the calculated tax bill (if any)
   • Submit the return
   • You'll receive a confirmation reference number

8. Keep Records

   • Save a copy of your submitted return
   • Keep all supporting documents for at least 6 years
   • Save your confirmation email

If You Don't Need to File a Full Return

If your total income is below the threshold requiring Self Assessment BUT you want to register crypto losses to carry forward, you can write to HMRC instead.

What to include in your letter:

• Your full name and National Insurance number
• The tax year the losses occurred
• A detailed calculation of your losses
• A breakdown showing how you calculated the loss
• Supporting evidence of transactions
• A clear statement that you're registering losses^[23]

Send to:

HMRC Capital Gains
BX9 1AS
United Kingdom

Time Limit: You must claim losses within four years of the end of the tax year in which they occurred. For 2024/25 losses, you have until 5 April 2029.^[24]

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Negligible Value Claims Explained

A negligible value claim (NVC) is a special provision that allows you to claim a capital loss on assets that have become worthless or nearly worthless, WITHOUT actually selling them.^[25]

When to Use an NVC

Consider an NVC when:

• Your crypto has become genuinely worthless
• You want to claim the loss but don't want to (or can't) sell
• You've lost access due to lost keys and can prove it
• Your crypto was on a failed exchange with no recovery prospects
• The tokens are from a rug pull and can't be traded

How NVCs Work

When HMRC accepts your NVC, you're treated as if you:

1. Sold the crypto for its current (negligible) value
2. Immediately bought it back at that same negligible value

This "deemed disposal and reacquisition" allows you to:

• Claim a capital loss equal to your original cost minus the negligible value
• Still technically own the crypto (if you want to keep it for some reason)
• Carry the loss forward to offset future gains^[26]

The Section 104 Pool Requirement

Here's a critical point many people miss: You must make the NVC for your entire Section 104 pool of that crypto, not just specific coins.

Example of the problem:

• You own 5 Bitcoin across three different wallets
• 2 BTC are stuck on the failed FTX exchange
• You still have access to the other 3 BTC
• You CANNOT make an NVC for just the 2 BTC on FTX
• It's all or nothing for your entire BTC pool

This is why disposing of the asset (selling, swapping, gifting, burning) is often more practical than an NVC.^[27]

What Information to Include in Your NVC

Your negligible value claim must state:

1. Asset Details

   • Type of cryptocurrency
   • Amount/quantity of coins
   • When you acquired them
   • Original cost

2. Why It's Negligible

   • Clear explanation of why the asset is now worthless
   • Evidence supporting the claim (exchange bankruptcy filing, rug pull proof, etc.)
   • Current market value (usually zero or near-zero)

3. Tax Year for the Claim

   • You can choose the tax year when the asset became negligible
   • Or the year you're making the claim
   • This gives you some flexibility for tax planning

4. Section 104 Pool Confirmation

   • Acknowledge you're claiming for the entire pool
   • Provide the total quantity in your pool across all holdings^[28]

Evidence Required

HMRC will want solid proof. Depending on your situation, provide:

For Lost Private Keys:

• Evidence you owned the crypto (transaction history, screenshots)
• Explanation of how the key was lost
• Steps you took to try to recover it
• Expert opinion (if available) that recovery is impossible
• Screenshots of wallet showing balance but no access

For Exchange Failures:

• Account statements showing your holdings
• Bankruptcy filing documents
• Official communications from the exchange
• Proof of claims filed in bankruptcy proceedings
• Evidence there's no prospect of recovery

For Rug Pulls/Scams:

• Original purchase evidence
• Screenshots showing project abandonment
• Evidence of developer disappearance (dead social media, shut down website)
• Current token value (usually zero)
• Blockchain transaction showing you still hold the tokens

How to Submit Your NVC

Option 1: Within Self Assessment

• Include it as part of your SA108 form
• Report the loss in the standard capital losses boxes
• Attach an explanatory note about the NVC

Option 2: Separate Written Claim

• Write to HMRC's Capital Gains team
• Include all required information and evidence
• Send to the Capital Gains address (BX9 1AS)

Option 3: As Part of a Letter (if not filing SA)

• If you don't normally file Self Assessment
• Write to HMRC registering both the loss and the NVC^[29]

HMRC's Decision

Be aware:

• HMRC will review your claim
• They may accept it, reject it, or request more information
• "Negligible" is somewhat subjective
• HMRC can challenge claims they think are premature
• Having strong documentation is critical

If rejected, you'll need to either:

• Provide additional evidence
• Wait until the asset is definitively worthless
• Actually dispose of the asset instead

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Using Your Losses Effectively

Once you've registered your crypto losses, here's how to make the most of them:

Offsetting Losses Against Gains

Same Tax Year:
Losses automatically offset gains in the same tax year. You use losses to reduce gains down to the CGT annual exempt amount (£3,000 for 2024/25 and 2025/26).^[30]

Example:

• You have £8,000 in crypto gains
• You have £6,000 in crypto losses
• Net gain: £8,000 - £6,000 = £2,000
• This is below the £3,000 allowance, so no tax due

Important: You must use current-year losses to reduce gains to the annual exempt amount, even if you don't want to. You can't choose to save them for later.

Carrying Forward Losses

Any losses you don't use in the current year can be carried forward indefinitely.^[31]

Key Rules:

• Carried-forward losses can only offset future capital gains
• They cannot be carried back to previous years
• There's no time limit—you can keep them forever
• But you must have claimed them with HMRC in the first place

Strategy:
If you have small gains and large losses, you might not use all your losses this year. That's fine—register the full loss amount, and carry forward whatever you don't use.

Example:

• 2024/25: You have £15,000 loss and £2,000 gain
• After offsetting: £13,000 loss remaining
• You carry forward £13,000 to use in future years
• 2025/26: You have £10,000 gain
• Use £7,000 of brought-forward losses (to reduce to £3,000 allowance)
• Carry forward the remaining £6,000 to 2026/27

Losses Can Only Offset Capital Gains

A crucial limitation: Crypto capital losses cannot reduce your income tax.

You cannot use crypto losses to offset:

• Employment income (salary, wages)
• Self-employment profits
• Rental income
• Dividends
• Interest
• Pension income

They ONLY offset capital gains, including:

• Future crypto gains
• Gains from selling property (not your main home)
• Gains from selling shares
• Gains from selling other assets^[32]

Tax Loss Harvesting Strategy

Some investors use "tax loss harvesting" to actively manage their tax position:

The Concept:

• You sell crypto that's sitting at a loss
• This crystallises the loss for tax purposes
• You can then buy back the crypto (careful of the 30-day rule!)
• The loss offsets gains from profitable trades

Be Careful:

• Remember the 30-day rule—if you rebuy within 30 days, the loss is matched against that purchase
• Plan your trades carefully to avoid accidentally negating your loss
• Some people wait 31+ days before rebuying

Best Time:
Many investors do this near the end of the tax year (February-March) to:

• Review their overall position
• Identify assets sitting at a loss
• Harvest those losses before 5 April
• Offset gains from earlier in the year

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Common Mistakes to Avoid

1. Not Keeping Detailed Records

The Mistake: Relying on memory or incomplete exchange data.

The Consequence: You can't prove your losses to HMRC.

The Fix:

• Export transaction histories from ALL exchanges
• Screenshot your wallets
• Document transfers between your own wallets
• Keep records for at least 6 years
• Use crypto tax software to consolidate everything

2. Forgetting About Crypto-to-Crypto Swaps

The Mistake: Thinking only GBP sales count as disposals.

The Consequence: Underreporting disposals and miscalculating gains/losses.

The Fix:

• Remember: swapping Bitcoin for Ethereum is a disposal
• You need to calculate the GBP value at the time of the swap
• This can generate gains OR losses
• Track all swaps, not just sales to pounds

3. Ignoring the 30-Day Rule

The Mistake: Selling at a loss and buying back immediately.

The Consequence: Your loss gets matched against the repurchase, potentially creating a gain instead.

The Fix:

• Wait at least 31 days if you plan to rebuy
• Or accept that the 30-day rule will apply
• Plan ahead if you're tax loss harvesting

4. Not Claiming Losses Within 4 Years

The Mistake: Thinking you can claim losses whenever you want.

The Consequence: After 4 years, the loss is gone forever.

The Fix:

• Claim losses promptly
• Set calendar reminders
• Don't wait until you have gains to claim old losses
• File even if you don't owe tax

5. Confusing Income Tax and Capital Gains Tax

The Mistake: Trying to offset losses against employment income.

The Consequence: HMRC rejects your claim.

The Fix:

• Understand the difference
• Losses only offset capital gains
• Crypto income (mining, staking) is separate and taxed as income

6. Incomplete Section 104 Pools

The Mistake: Forgetting about crypto held in different wallets or old exchanges.

The Consequence: Incorrect cost basis calculations.

The Fix:

• Account for ALL holdings of each crypto across all platforms
• Include crypto in cold storage
• Check old exchange accounts you forgot about
• Import everything into your tax software

7. Not Getting Professional Help for Complex Situations

The Mistake: Trying to DIY a complicated situation (exchange bankruptcies, large losses, NFTs, DeFi).

The Consequence: Errors, missed opportunities, or HMRC challenges.

The Fix:

• Consult a crypto tax specialist for complex situations
• The cost is usually worth it
• Get help BEFORE filing, not after HMRC questions you

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Important Deadlines Summary

2024/25 Tax Year (6 April 2024 - 5 April 2025)

Deadline	What Happens
5 October 2025	Last day to register for Self Assessment (if first time)
31 October 2025	Deadline for paper Self Assessment tax returns
31 January 2026	Deadline for online Self Assessment tax returns
31 January 2026	Deadline to pay any tax due
5 April 2029	Last day to claim losses from 2024/25 tax year (4-year limit)

Penalties for Late Filing

• 1 day late: £100 automatic penalty
• 3 months late: £10 per day (up to 90 days)
• 6 months late: £300 or 5% of tax due, whichever is higher
• 12 months late: £300 or 5% of tax due, whichever is higher, PLUS potential investigation

Don't risk it. File on time.

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The 2026 Crypto Reporting Changes (CARF)

Be aware: Starting 1 January 2026, the UK implemented the Crypto-Asset Reporting Framework (CARF).^[33]

What this means:

• UK crypto exchanges must report your transactions to HMRC
• This data will be shared internationally with other tax authorities
• HMRC will have much more visibility into crypto activities
• Underreporting will be easier to detect

Bottom line: Accurate reporting is more important than ever. HMRC will be cross-checking your Self Assessment against data they receive from exchanges.

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Wrapping Up

Reporting crypto losses to HMRC doesn't have to be overwhelming if you:

1. Keep meticulous records from day one
2. Understand the basic rules around what counts as a loss
3. Calculate your Section 104 pools correctly
4. Meet the deadlines for claiming and filing
5. Use the right forms (SA100 and SA108 with the new crypto section)
6. Provide proper documentation to support your claims

The silver lining of crypto losses is that they can significantly reduce your tax bill, both this year and in future years. But you must claim them properly and within the time limits.

If your situation is complex—you've lost access to crypto, you're dealing with failed exchanges, or you're unsure about calculations—it's worth consulting with a crypto tax specialist. The cost of professional help is far less than the penalties for getting it wrong, or the opportunity cost of not claiming losses you're entitled to.

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Need Help With Your Crypto Taxes?

Calculating crypto losses and navigating HMRC's rules can be complicated, especially if you've traded across multiple exchanges or experienced unusual situations like exchange failures.

Moonscape makes it simple:

• Automatically import transactions from all major exchanges and wallets
• Calculate your Section 104 pools accurately
• Generate HMRC-compliant tax reports
• Identify opportunities to offset losses
• Produce the documentation you need for Self Assessment

Whether you're dealing with simple trading losses or complex situations like frozen funds or rug pulls, Moonscape handles the calculations so you can file confidently and meet HMRC's requirements.

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Sources & References

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This guide is for informational purposes only and doesn't constitute tax advice. Tax laws change frequently, and individual circumstances vary. For personalized guidance, consult a qualified tax professional or accountant familiar with cryptocurrency taxation.

Last updated: January 2026

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1. HMRC Cryptoassets Manual, CRYPTO10100 - "HMRC do not consider cryptoassets to be currency or money... capital gains treatment is appropriate." https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto10100 ↩︎

2. Crunch, "How to Use Crypto Losses to Slash your HMRC Tax Bill in 2025" - Explanation of realised vs unrealised losses. https://www.crunch.co.uk/knowledge/article/how-to-use-crypto-losses-to-slash-your-hmrc-tax-bill ↩︎

3. HMRC Cryptoassets Manual, CRYPTO21200 - "Disposing includes selling cryptoassets for money, exchanging cryptoassets for a different type of cryptoasset, using cryptoassets to pay for goods or services, and giving away cryptoassets to another person." ↩︎

4. HMRC Cryptoassets Manual, CRYPTO22450 - "If the private key to a cryptoasset is lost, this is not considered to be a disposal by itself as the individual is still the beneficial owner of the cryptoasset." https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto22450 ↩︎

5. Recap Help Center, "Can I claim loss relief from HMRC if my cryptocurrency has lost all value?" - "HMRC has released guidance confirming that if an asset now has little or no value, an individual can submit a negligible value claim to HMRC." https://help.recap.io/en/articles/3315677-can-i-claim-loss-relief-from-hmrc-if-my-cryptocurrency-has-lost-all-value ↩︎

6. HMRC Cryptoassets Manual, CRYPTO22450 - "If the private key to a cryptoasset is stolen (and the underlying cryptoassets are then stolen or transferred) this is not a disposal... the individual still owns the underlying asset in the sense that they still have a legal title to it." ↩︎

7. KoinX, "HMRC Guidelines For Lost, Stolen, And Defrauded Crypto Assets" - Discussion of scam scenarios and negligible value claims. https://www.koinx.com/tax-guides/lost-stolen-crypto-uk ↩︎

8. Recap Blog, "Do I Pay Tax on Lost or Stolen Crypto and Can I Recover it?" - "Because this was led by US courts, UK tax guidance is still unclear. The position from HMRC is that you should be able to make a negligible value claim." https://recap.io/blog/tax-on-lost-or-stolen-crypto ↩︎

9. Saffery, "Managing Crypto Losses" - "We know that it can be difficult to obtain the information required to calculate your losses from failed exchanges, so we can help construct these calculations from whatever information is available to you." https://www.saffery.com/insights/articles/managing-crypto-losses/ ↩︎

10. Saffery, "Managing Crypto Losses" - "Many blockchains are equipped with a 'burn address'... If you wish to crystallise losses on assets that you consider worthless... you may choose to send them to the appropriate burn address." ↩︎

11. Koinly, "Is Lost Crypto a Capital Loss? UK HMRC Guide" - "As your tokens are pooled as part of the UK share pooling method, your negligible value claim needs to be made in respect of the whole section 104 pool." https://koinly.io/blog/lost-stolen-crypto-uk/ ↩︎

12. Crunch, "How to Use Crypto Losses to Slash your HMRC Tax Bill in 2025" - NFT disposal methods including selling, gifting, and negligible value claims. ↩︎

13. Koinly, "Crypto Tax UK: Expert Guide to HMRC Rules 2026" - "Because investors often hold multiple units of the same crypto bought at different prices, HMRC requires the 'share pooling' method to determine cost basis." https://koinly.io/guides/hmrc-cryptocurrency-tax-guide/ ↩︎

14. Koinly, "Crypto Tax UK: Expert Guide to HMRC Rules 2026" - Explanation of Same-day rule, 30-day rule, and Section 104 pooling. ↩︎

15. Koinly, "How to Report Cryptocurrency to HMRC in 2026" - "Any crypto investor who made more than £1,000 in crypto income or more than £3,000 in capital gains for the 2024-2025 financial year must submit a Self Assessment Tax Return to HMRC." https://koinly.io/blog/uk-hmrc-expects-crypto-investors-to-report-any-capital/ ↩︎

16. Recap Blog, "New 2025 Self Assessment Tax Return" - "You don't need to file your return until 31 January 2026, but the window opens from 6 April 2025." https://recap.io/blog/the-2025-self-assessment-tax-return-form ↩︎

17. Recap Blog, "New 2025 Self Assessment Tax Return" - "Previously, if you sold, swapped, or spent crypto, you reported any gains in the general Capital Gains section... Now, from the 2024/25 tax year onward, there's a separate section specifically for cryptoasset disposals." ↩︎

18. Blockpit, "Crypto Tax UK: Ultimate Tax Guide for 2025" - SA100 form instructions for reporting crypto income and capital gains. https://www.blockpit.io/tax-guides/crypto-tax-united-kingdom-hmrc ↩︎

19. HMRC Form SA108 2025, Page CG 2 - Official form showing boxes 13.1-13.8 for cryptoassets reporting. https://assets.publishing.service.gov.uk/media/67e160d5d8e313b503358cc8/sa108-2025.pdf ↩︎

20. Saffery, "Managing Crypto Losses" - "If you're required to file a return, the losses should be included on the SA108 capital gains pages... with a calculation attached." ↩︎

21. Recap Blog, "A Guide to the 2024-25 Split Tax Year for UK Crypto Investors" - "HMRC's Adjustment Calculator can also help you work out the adjustment for your Self Assessment tax return for disposals of assets on or after 30 October 2024 where the rates changed." https://recap.io/blog/a-guide-to-the-2024-25-split-tax-year ↩︎

22. Recap Blog, "A Guide to the 2024-25 Split Tax Year" - Capital gains tax rate changes effective 30 October 2024. ↩︎

23. Saffery, "Managing Crypto Losses" - "If you don't meet the criteria to need to file a return, then capital losses can be claimed by writing a letter to HMRC's Capital Gains Tax Queries address." ↩︎

24. MoneyWeek, "Crypto platforms will be forced to share tax info with HMRC" - "Investors can also report losses up to four years after the end of the tax year in which they disposed of a crypto asset." https://moneyweek.com/investments/bitcoin-crypto/crypto-platforms-now-need-to-provide-tax-details-to-hmrc ↩︎

25. HMRC Cryptoassets Manual, CRYPTO22500 - Negligible value claims for cryptoassets. https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto22500 ↩︎

26. Recap Help Center, "Can I claim loss relief from HMRC if my cryptocurrency has lost all value?" - "You are deemed to dispose of the cryptoasset for its current market value, therefore resulting in a capital loss if the allowable costs are more than this." ↩︎

27. Koinly, "Is Lost Crypto a Capital Loss? UK HMRC Guide" - Section 104 pool requirement for negligible value claims explained. ↩︎

28. HMRC Cryptoassets Manual, CRYPTO22500 - "The negligible value claim will need to state the: type of token, number of tokens, date of acquisition, tax year for the claim." ↩︎

29. Charlton Baker, "What tax relief do I get if my crypto becomes worthless, lost or stolen?" - Methods for submitting negligible value claims. https://www.charltonbaker.co.uk/news-blog/article-11-the-chain-of-crypto-taxes ↩︎

30. Koinly, "Crypto Tax UK: Expert Guide to HMRC Rules 2026" - "Every UK taxpayer gets a £3,000 annual tax-free allowance for capital gains. It's only gains over this allowance that are taxable." ↩︎

31. Low Incomes Tax Reform Group, "Cryptoassets and tax" - "In general, you can only deduct a capital loss from capital gains arising in the same tax year or a future tax year." https://www.litrg.org.uk/savings-property/cryptoassets-and-tax ↩︎

32. Low Incomes Tax Reform Group, "Cryptoassets and tax" - "You cannot offset capital losses arising on the disposal of cryptoassets against your income." ↩︎

33. Taina Tech, "HMRC Crypto Asset Reporting Regulations 2025 | CARF" - Implementation timeline and requirements for CARF in the UK. https://www.taina.tech/resources-news-and-awards/hmrc-crypto-asset-reporting-regulations ↩︎