Figuring out crypto taxes in the UK might appear complex, but once you get the basics, understanding the rules becomes much easier. Nexo has partnered with Koinly to simplify crypto taxation requirements in the UK for 2025. Below is some key information on the topic brought to Nexo by Koinly, one of the market’s leading crypto tax solutions providers, as well as answers to common questions, and details about how Nexo’s Koinly integration can help you generate sound tax reports quickly and cost-efficiently.

Important: Nexo does not offer tax advice. This article is not intended as advice or a personalised recommendation. However, Nexo aims to provide Nexo’s with clear and accessible information. Please consult a tax professional for advice specific to your tax situation.

In this article:

1. How does the UK approach the taxation of crypto
2. How much tax do you pay on crypto in the UK
3. What is a taxable event in the UK
4. Key allowances and reliefs
5. How to calculate your crypto taxes
   • Using the Nexo/Koinly Integration
   • Calculating your crypto taxes manually
6. Reporting crypto taxes in the UK
7. How to reduce your crypto tax bill
8. Special situations
9. Record-keeping
10. Penalties for non-compliance
11. Final tips

1. How does the UK approach the taxation of crypto

HMRC treats cryptocurrency as an asset rather than a currency. Depending on your activities, you may owe:

• Capital gains tax (CGT): On profits from selling, trading, or gifting crypto (excluding to a spouse).

• Income tax: On earnings from mining, staking, some airdrops, or getting paid in crypto.

2. How much tax do you pay on crypto in the UK

Capital gains tax (CGT):

• Tax-free allowance (2024/25): This is the amount of income you can earn each year without paying tax. In the UK, for 2024/2025, this is £3,000.

• Rates for gains realized from Oct 30, 2024 onward:

• • Basic rate taxpayers: 18%

• • Higher/additional rate taxpayers: 24%

• Rates for gains realized prior to October 30, 2024:

• • Basic rate taxpayers: 10%

• • Higher/additional rate taxpayers: 20%

Income tax:

• Personal allowance: Up to £12,570 tax-free income (excluding for those earning over £100,000)

• Rates:

• • Basic rate: 20%

• • Higher rate: 40%

• • Additional rate: 45%

3. What is a taxable event in the UK

Capital gains tax applies to:

• Selling crypto for GBP or another fiat currency.

• Trading one crypto for another (e.g., BTC to ETH).

• Using crypto to purchase goods or services.

• Gifting crypto (except to your spouse/civil partner).

• Many DeFi transactions.

Income tax applies to:

• Receiving crypto as payment.

• Mining and staking rewards.

• Airdrops, if received in exchange for a service or activity.

• Many DeFi transactions.

4. Key allowances and reliefs

• Capital gains tax allowance: As mentioned previously, it is £3,000 for 2024/25, and £6,000 for 2023/2024.

• Personal income tax allowance: Up to £12,570 tax-free (excluding those earning over £100,000).

• Trading allowance: This entails a £1,000 tax-free allowance for income from casual or self-employed trading, including cryptocurrency, without needing to declare it to HMRC.

• Gifting to spouse/civil partner: Transferring crypto to your spouse or civil partner is tax-free.

5. How to calculate your crypto taxes

Using the Nexo/Koinly Integration

You can calculate your crypto taxes and generate a report very easily via Nexo’s partnership with Koinly. All you need to do is import your Nexo transaction history into Koinly and it’ll calculate your capital gains, losses, income, and more from your Nexo transactions. There are two ways you can do this, and we’ll cover how to do both step by step.

Step 1: Sign up for your free Koinly account and connect your Nexo account to Koinly.

Nexo connects to Koinly via SSO, or you can upload a CSV file of your transaction history. For single sign-on (SSO), it’s as simple as heading to the wallets page in Koinly and searching for Nexo.

Step 2: Select set up auto-sync and then continue to Nexo.

You’ll be taken to the Nexo site to grant read-only permissions for Koinly, and Koinly will automatically import your Nexo transaction data via API.

If you’d rather manually import your transactions via CSV, you can export a CSV file of your transaction history from Nexo. Just log in to Nexo and select transactions in the top menu. In the menu on the right, select a date range that covers your entire Nexo trading history. Under transaction type and assets, make sure all types and all assets are selected. Once you’ve done all this, hit export, and you’ll export your Nexo transaction history file. Once you have your file, head into Koinly, search for Nexo on the wallets page, and select import from file to upload your CSV.

Remember, you’ll need to do this for Nexo and every other exchange, wallet, or blockchain you use to ensure Koinly can calculate your crypto taxes correctly.

Step 3: Let Koinly calculate your capital gains, losses, and income

Once it’s got your transaction data, Koinly will get to work calculating your crypto taxes.

Here’s what goes on under the hood:

Step 4: Download your crypto tax report

Once you’ve checked your tax summary and are happy with it, just download the tax report you want when you need it. Remember that you will need to upgrade your plan to do this. A list of Koinly’s paid plans and pricing is available here. Koinly offers a variety of crypto tax reports for investors around the world, including the ATO myTax Report, HMRC Capital Gains Tax Summary, and the Complete Tax Report that can help you file in multiple European countries.

Calculating your crypto taxes manually

Alternatively, you can calculate your taxes manually by following the steps below.

Step 1: Determine the cost basis.

Depending on how you got your crypto, this is one of the following three prices:

• Original purchase price plus transaction fees.

• For received crypto, use its market value in GBP on the day you received it.

• For multiple assets of the same kind, investors must use the Share Pooling accounting method, including the same-day and bed-and-breakfasting rule.

Step 2: Calculate gains or losses.

• Subtract what you originally paid (the cost basis) from the market value of your crypto when you sold it.

Step 3: Apply allowances:

• Deduct any tax-free allowances to find out how much of your gains or income ought to be taxed.

Step 4: Offset losses:

• Declare losses to reduce your tax liabilities.

6. Reporting crypto taxes in the UK

When to report:

• The UK tax year runs from April 6 to April 5.

• File your Self-Assessment Tax Return by January 31 following the tax year. Investors must register by the 5th of October to file online if they haven’t previously. Those filing with paper forms must do so by October 31st of the same year.

What to report:

• For capital gains: Use the SA108 form.

• For income: Report on your SA100 form under “miscellaneous income.”

7. How to reduce your crypto tax bill

• Use tax-free allowances: Maximise personal and trading allowances.

• Offset losses: Record and declare all capital losses.

• Gifting to spouse: Share gains across both allowances or utilise lower tax brackets.

• Donate to charity: Crypto donations to registered charities are tax-free.

Note: According to Koinly’s tax guides and general blog posts.

8. Special situations

• Lost or stolen crypto: Losses from theft are not tax-deductible, but you can make a negligible value claim in some cases.

• DeFi and staking: Rewards may be taxed as income or capital gains depending on how they’re paid.

• Airdrops and Forks: These are taxed as income if earned through activity. No income tax for hard forks unless the new asset is sold or disposed of.

9. Record-keeping

It is helpful to keep detailed records of the following throughout the entire year:

• Dates and amounts of transactions.

• Market value of assets at acquisition and disposal.

• Wallet addresses and transfer details.

• Any related expenses, such as transaction fees.

10. Penalties for non-compliance

Failing to report crypto taxes can lead to fines and interest on unpaid taxes, or HMRC investigations for up to 20 years if deliberate tax evasion is suspected.

11. Final tips

• Use a crypto tax calculator: Koinly makes it easy to file your crypto taxes with an HMRC-friendly tax report.

• Seek professional advice: Complex cases, like high-frequency trading or DeFi, may require a tax advisor.

The information in this article is for general information only. It should not be taken as consulting professional advice from either Nexo or Koinly. Neither Nexo nor Koinly is a financial adviser. You should consider seeking independent legal, financial, taxation, or other advice to check how the website information relates to your unique circumstances.