Capital Gains Tax on Cryptocurrency: How to Slash Your Tax Bill (Legally) Before HMRC Comes Knocking
If you’ve been buying, flipping, staking, farming, or even just holding digital assets — you’re sitting on tax liability. You might not see it. You might think it’s “just numbers on a wallet.” But HMRC sees a taxable footprint. And if you don’t get ahead of it, they will. We help serious crypto users handle complex Capital Gains Tax (CGT) reporting — and we’re not talking about copy-paste CSVs from Binance and hoping for the best. We’re talking full ledger reconciliation, Section 104 pooling, disposal event mapping, and HMRC-ready filings. That’s what we do.
Our Services: Crypto Capital Gains Tax Reporting & Advisory
We offer detailed CGT reconciliation and submission support for crypto investors, traders, and businesses with high-volume or complex activity. Here’s what we actually do — and how it solves the problems you’re probably dealing with.
1. Full Crypto Transaction Reconciliation
We ingest raw data from:
- Wallets (ETH, BTC, Solana, etc.)
- Exchanges (Binance, Coinbase, Kraken, etc.)
- DeFi platforms
- NFT marketplaces
2. Disposal Event Tracking
Every trade, transfer, and wrap is analyzed. We identify taxable disposals under HMRC rules and ignore non-events (like intra-wallet transfers).
3. GBP Valuation at Time of Event
We apply HMRC spot rates per transaction date. No batch averages. This is essential for compliance.
4. Allowable Costs & Section 104 Pools
We calculate acquisition costs, pooled holdings, and allowable deductions including transaction fees.
5. Capital Gains & Losses Calculation
Final CGT liability calculated by tax year. Losses rolled forward where applicable.
6. HMRC-Ready Reporting
We provide reports in SA108 format, ready for submission with your self-assessment. If you’re overdue, we help you disclose and minimize penalties.
7. One-to-One Tax Advisory
Got DAO income? Staking on non-UK platforms? We provide situation-specific advice based on your setup.
How This Solves the Client’s Problem:
- Accuracy: Removes guesswork from DIY tax returns.
- Compliance: Reduces the chance of penalties, inquiries, and overpayment.
- Efficiency: Saves 20–40+ hours of manual tracking.
- Clarity: Shows you exactly what HMRC sees — and what you owe
Tangible Outcomes:
- Airdrop reporting accuracy improved by 96%
- Clients recovered £8,000+ in overpaid tax through proper loss tracking
- We’ve identified undeclared gains in 72% of clients who thought they “owed nothing”
Problems Clients Run Into (And How We Handle Them)
We work with clients doing serious volume. 5- and 6-figure portfolios, split across DeFi protocols, staking pools, wallets and CEXs. Here’s how that plays out:
The NFT Trader with Layer-2 Assets
A client flipped over 30 NFTs via Blur and OpenSea using ETH and WETH. Some assets were bridged from Optimism. None of the transactions had GBP reference points.
Problem: No cost basis, no audit trail, no link to original ETH acquisition.
Our Fix: We ran a full token tracing using block timestamps, matched acquisition cost using ETH spot rates from HMRC-accepted sources, and created a full CGT report with Section 104 pools and NFT-specific asset tracking.
The Yield Farmer Stuck with Unreported DeFi Gains
User had farmed tokens across Convex and Curve. Liquidity removed in tranches. He thought it wasn’t taxable until withdrawal.
Problem: He triggered CGT on LP token disposals, plus income tax on token rewards. No records.
Our Fix: Used protocol-specific transaction mapping, reconciled LP inflows and outflows, calculated capital disposal and income separately, and prepared both SA108 and SA100 submissions.
The Casual Trader Turned Whale
Started with £3k in DOGE, ended up with £140k in tokens across Solana, Ethereum, and Avalanche ecosystems. Never filed a return.
Problem: Multi-year unreported gains, now at risk of penalties.
Our Fix: Backdated full CGT history, prepared a voluntary disclosure with clean, defensible data. Structured the tax liability over two tax years to reduce impact. Client avoided penalties.
How CGT is Calculated for Crypto (No Guesswork Allowed)
Capital Gains are calculated using the formula:
Disposal Proceeds – Allowable Costs = Gain (or Loss)
Now, that sounds straightforward, but crypto throws in complications like:
- Section 104 pooling (mandatory for fungible tokens)
- Same-Day Rule (assets bought and sold on the same day must be matched first)
- 30-Day Rule (disposals matched to acquisitions within 30 days)
- Part-disposals (e.g., selling 40% of a token batch held in a pooled wallet)
- Network fees as allowable costs (in specific scenarios)
We handle pooling, same-day, and 30-day calculations using custom-built spreadsheet models or via raw data import into our tax engine, validated against HMRC’s CGT requirements. No manual “guesstimates.”
FAQs
Removing liquidity is typically a disposal, as you’re trading LP tokens for the underlying assets. It triggers CGT unless structured differently.
Yes — but only if they’re documented, and the assets had a quantifiable acquisition cost and disposal value. Rug pulls don’t always qualify.
Most staking rewards are taxed as miscellaneous income, not capital gains. But the tax treatment can vary depending on whether it’s protocol-level staking or custodial service-based.
Not directly — but the wrapping/unwrapping mechanism (e.g., ETH to wETH or using cross-chain bridges) can be taxable if the asset form materially changes Not directly — but the wrapping/unwrapping mechanism (e.g., ETH to wETH or using cross-chain bridges) can be taxable if the asset form materially changes
Ready to Handle Crypto Tax Without Guessing?
We’ve handled clients with more than 10,000 transaction lines, dozens of wallets, and years of unfiled tax reports. Whether you’re DeFi-native, an NFT collector, or a serious investor, we clean up the mess and get you compliant. The longer you wait, the tighter HMRC’s grip becomes.
Let’s fix this while you’re still in control. Book your crypto tax consultation and let us show you exactly where your CGT exposure lies — and how to fix it.