Cryptoasset losses

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When you have a crypto loss

For most individuals, cryptoassets are chargeable assets for Capital Gains Tax, so the normal rules apply: dispose of tokens for less than their allowable cost and you have a capital loss. Disposals include selling tokens for money, exchanging one token for another, and using tokens to pay for goods or services.

Moving tokens between wallets that you control is not a disposal, HMRC’s manual says, because you keep beneficial ownership.

GOV.UK reminds you that you can use capital losses to reduce your gains, but you’ll need to report them to HMRC first. Claim the loss on the capital gains pages of your return, or by letter if you aren’t in Self Assessment, within 4 years of the end of the tax year — see how to claim a capital loss.

Pooling

Tokens of the same type are pooled, and the cost of the pool is shared across the tokens you dispose of. GOV.UK says that exchange transaction reports can help, but they are not tax calculations and won’t track your pooled costs — you must keep your own records.

Proceeds for 2 tokens sold	£3,000
Pooled cost of 2 tokens (pool of 5 tokens cost £10,000)	minus (£4,000)
Capital loss	minus (£1,000)

Tokens that have become worthless

HMRC’s manual says that, as with other assets, you can crystallise a loss on tokens you still own if they have become worthless or of "negligible value" — by making a negligible value claim. Because tokens are pooled, the claim has to be made for the whole pool, not individual tokens. It should state the asset, the amount you are treated as disposing of it for (which may be nil) and the date of the deemed disposal. The loss then needs reporting; HMRC says you can make the claim at the same time.

Lost private keys

According to HMRC, misplacing your private key doesn’t count as a disposal — the tokens still exist and you still own them. But if it can be shown there is no prospect of recovering the key or accessing the tokens, HMRC says a negligible value claim could be made.

Theft, hacks and scams

HMRC’s position is that theft is not a disposal, because you still own the stolen asset and have a right to recover it — so victims of theft can’t claim a capital loss. The manual also says:

• if you paid for tokens but never received them, you may not be able to claim a capital loss;
• if you did receive tokens and they later became worthless, a negligible value claim may be possible — but not if they were already worthless when you got them.

Records HMRC expects

GOV.UK lists the records to keep for each transaction in each pool: the type of tokens, the date you disposed of them, the number disposed of and the number left, the value in pounds sterling, bank statements, and the pooled costs before and after the disposal. Wallet addresses can help too. See records and evidence.

On the return

GOV.UK says to report crypto gains on a Self Assessment return in pounds sterling, in the cryptoasset section, available on returns from the 2024 to 2025 tax year. In the 2025–26 notes, that section has its own "losses in the year" box and a claims box where the negligible value code can be entered. Box numbers can change — check the notes for the year you’re filing.

Questions people ask

My crypto was stolen in a hack. Can I claim a capital loss?

HMRC’s view is that theft isn’t a disposal, because you still own the tokens and have a right to recover them — so victims of theft can’t claim a capital loss. Losing your private key isn’t a disposal either, though HMRC says a negligible value claim may be possible if there’s no prospect of recovering access.

Sources

Checked 4 October 2026 for the 2026/27 tax year. We read these primary sources for this guide:

1. GOV.UK: Check if you need to pay tax when you sell cryptoassets (gov.uk)
2. HMRC Cryptoassets Manual CRYPTO22100: What is a disposal (gov.uk)
3. HMRC Cryptoassets Manual CRYPTO22400: Loss or theft of private keys (gov.uk)
4. HMRC Cryptoassets Manual CRYPTO22450: Theft, hacks and fraud (gov.uk)
5. HMRC Cryptoassets Manual CRYPTO22500: Negligible value claims (gov.uk)
6. HMRC: SA108 Capital Gains Tax summary notes (2025–26 edition) (gov.uk)

Contains public sector information licensed under the Open Government Licence v3.0. This guide adapts and summarises that information in our own words. taxloss.co.uk is an independent guide. It is not affiliated with, endorsed by or connected to HM Revenue & Customs (HMRC) or the UK Government. Spotted something out of date? Tell us.

More on capital gains losses

• 01Capital losses: what counts as an allowable lossWhen you sell or give away an asset for less than it cost you, you may have a capital loss. It only reduces your tax once it is an "allowable loss" — which depends on the asset and on telling HMRC in time.
• 02How to claim a capital loss — and the 4-year time limitA capital loss only counts once you have told HMRC about it, with the amount. Here’s how to do that on your tax return or by letter, and the deadline you must meet.
• 03How capital losses are set against gains — and the annual exempt amountThis year’s losses are used up in full first, even if that wastes your tax-free allowance. Losses brought forward from earlier years are only used to bring your gains down to the annual exempt amount — the rest carries on.
• 04Losses on disposals to family and connected peopleSell or give something to a relative, business partner or a company you control and make a loss, and that loss is "clogged" — you can only use it against gains on other disposals to the same person. Transfers to a spouse or civil partner usually give no loss at all.
• 05Shares that have become worthless: negligible value claimsIf shares (or other assets) you still own have become worth next to nothing, a negligible value claim lets you be treated as having sold them, creating a capital loss. The claim can be backdated — within limits.
• 06Share loss relief: setting a loss on shares against incomeLosses on shares you subscribed for in a qualifying unlisted trading company — including EIS and SEIS shares — can sometimes be set against your income instead of only against gains. The claim has a shorter deadline.
• 08Losses when you sell property — and the 60-day UK property returnA loss on selling a second home, buy-to-let or land is a capital loss you claim in the usual way. UK residents normally only use the 60-day "Capital Gains Tax on UK property" service when tax is due — non-residents must report every disposal, even a loss.