Asked chatgbt:
HMRC are clamping down on crypto in uk starting in 2026. Is there a way to legally avoid being taxed, especially if you only had small amounts.
It said:
You're absolutely right—HMRC is ramping up its enforcement around crypto taxation from 1 January 2026, through the new international reporting initiative, the Crypto-Asset Reporting Framework (CARF)
The Scottish Sun
The Sun
. Now, if you’ve only held or traded small amounts of crypto, there are still legitimate and legal ways to reduce or even avoid paying tax—here’s how:
1. Use the Annual CGT Allowance (£3,000 for 2025/26)
For the 2025/26 tax year, the Capital Gains Tax (CGT) annual exemption is £3,000 per person. Profits up to that threshold are entirely tax-free
cryptoccountant.co.uk
Pie Tax
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If your crypto gains are under that limit, you generally do not need to report or pay tax—unless your total disposal proceeds exceed £50,000 and you're registered for Self Assessment
cryptoccountant.co.uk
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Pro tip: If you're married or in a civil partnership, you can effectively double this allowance by gifting crypto to your partner before disposal—since transfers between spouses are tax-free
digitalaccountingltd.com
Pie Tax
Iconomi
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2. Know Which Crypto Transactions Are Non-Taxable
Certain crypto activities do not trigger a taxable event:
Buying crypto with fiat (e.g., GBP)
Simply holding ("HODLing")
Transferring between your own wallets or accounts
Gifting crypto to a spouse or civil partner
Donating to a registered UK charity
digitalaccountingltd.com
legendfinancial.co.uk
These actions don’t count as disposals and don’t trigger CGT, though you should still keep records.
3. Offset Losses Using Tax Loss Harvesting
If any of your crypto investments incurred losses:
You can use those losses to offset gains in the same tax year—or carry them forward indefinitely to offset future gains
My Tax Accountant
Iconomi
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Example: A £5,000 gain offset by £2,000 in losses results in a net £3,000 gain—that remains tax-free
Iconomi
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4. Benefit from the £1,000 Trading/Miscellaneous Income Allowance
If you receive small amounts of crypto as income (e.g., staking rewards or airdrops):
HMRC offers a £1,000 trading/miscellaneous income allowance—income below this amount doesn't need to be reported
digitalaccountingltd.com
cryptoindustry.news
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5. Time Your Disposals Across Tax Years
The UK tax year runs from 6 April to 5 April. You can strategize:
Split sell events across two tax years to maximize annual allowance usage—for example, part in March and part in April
My Tax Accountant
cryptoccountant.co.uk
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6. Keep Records, Especially Before 2026 Reporting Changes
Starting in 2026, platforms must share your personal and trade data with HMRC—making accuracy and transparency essential
The Scottish Sun
Financial Times
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Ensure you log dates, amounts, GBP values, fees, and wallet details for all transactions—even transfers and swaps
Barnett & Co. Accountants
digitalaccountingltd.com
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7. If Unsure, Voluntary Disclosure Is Better
If past gains were unreported:
Consider using HMRC’s Digital Disclosure Service to correct errors proactively—you’ll generally face lower penalties than if HMRC contacts you first
Barnett & Co. Accountants
Simply Business UK
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HMRC is already sending “nudge” letters to people it suspects have undeclared crypto gains—better to get ahead of this
Financial Times
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Summary Table
Situation Legal Route to Minimize Tax
Small profits (≤ £3,000) No tax or reporting needed
Married or in a civil partnership Use spouse’s allowance via gifting
Incurred losses Offset or carry forward to reduce future CGT
Small crypto income (< £1,000) Covered by trading/misc. income allowance
Large disposal planned Split sales across tax years
Reporting concerns or undeclared gains Voluntary disclosure via HMRC service
Final Thoughts
If your holdings are small, it's quite possible that no tax is due—especially if managed carefully. Gifting to a spouse, offsetting losses, and separating disposals can all help legally minimize liability. But starting in 2026, with stricter reporting rules, you'll want impeccable records. If you're unsure about your personal situation, chatting to a qualified tax advisor who specialises in crypto is a smart move.
Would you like help exploring suitable software (like Koinly or CoinTracker) to organize your records, or comparing tax advisor services?
#hmrc #tax #bitcoin #nostr #anarchyⒶ #decentralisation #freedomtech #blockchain #freepalestine
