Are Crypto Fees Tax Deductible in the UK? Gas, Exchange and Transfer Fees Under TCGA s.38

Fees are the most consistently mis-handled item in UK crypto tax returns. Some people deduct nothing and overpay. Others deduct every gas fee they ever paid, including on transfers between their own wallets, and overstate their losses. The rules are short. This post sets them out and applies them to the fees you actually pay.

The legal test: TCGA 1992 s.38

When you dispose of an asset, the amount you can deduct from the proceeds is defined by s.38 of the Taxation of Chargeable Gains Act 1992. Three headings matter for crypto:

• s.38(1)(a) — the consideration you gave to acquire the asset, plus the incidental costs of acquiring it.
• s.38(1)(b) — expenditure that enhanced the asset's value (rarely relevant to crypto).
• s.38(1)(c) — the incidental costs of making the disposal.

Section 38(2) then defines "incidental costs" tightly: fees, commission or remuneration for professional services, costs of transfer or conveyance, and costs of advertising to find a buyer or seller, plus costs reasonably incurred in valuing the asset for the computation.

The word doing the work is incidental. A cost is deductible only if it is incurred wholly and exclusively for the purpose of acquiring or disposing of the asset. A cost incurred to hold, move or manage an asset is not.

HMRC's crypto-specific list: CRYPTO22150

HMRC's Cryptoassets Manual restates s.38 for tokens at CRYPTO22150. Allowable costs include:

• the sterling amount originally paid for the asset,
• transaction fees paid to have the transaction included on the blockchain,
• advertising for a purchaser or a vendor,
• professional costs of drawing up a contract for the acquisition or disposal,
• costs of making a valuation or apportionment for the computation.

And, in the same section, HMRC gives its view on the one that causes most arguments: fees paid to transfer tokens between your own wallets are not allowable, because moving an asset you already own is neither an acquisition nor a disposal. Equally, costs you have already deducted against income (for example, mining hardware set against mining income) cannot be deducted a second time for CGT.

Fee by fee

Exchange trading fees

Deductible. A £15 fee on a £3,000 purchase goes into the Section 104 pool's cost (s.38(1)(a)); a £12 fee on a sale reduces that disposal's gain (s.38(1)(c)). This applies whether the fee is charged in pounds, deducted from the token amount, or taken in the exchange's own token — in the last case the fee is also a tiny disposal of that token.

Gas on a swap

Deductible, with a twist. Gas paid on a Uniswap swap is a transaction fee for including the disposal on the blockchain, so it is an incidental cost of the disposal. But gas is paid in ETH (or the chain's native token), so paying it is itself a disposal of that ETH at its sterling value. In practice: the sterling value of the gas is deducted from the swap's gain, and a separate one-line disposal of the ETH used for gas is recorded, usually with a negligible gain or loss. Tools handle this automatically; a spreadsheet often forgets the second half.

Gas on a transfer between your own wallets

Not deductible against a gain, per CRYPTO22150. Moving ETH from Coinbase to your Ledger is not a disposal of the ETH, so the fee has nothing to be incidental to. The ETH spent on the fee is still a disposal of that ETH at market value, so it produces its own small gain or loss, but you cannot add the fee to the pool cost of the ETH you moved.

Bridging fees

Depends on whether the bridge is a disposal. If bridging swaps your token for a different token on another chain (for example, ETH to a wrapped representation) HMRC's view at CRYPTO22100 is that this may be a disposal, in which case the bridge fee is an incidental cost of it. If the bridge merely moves the same asset, treat the fee like a self-transfer: not allowable against the moved asset. See bridging tax in the UK for the disposal question itself.

Withdrawal fees charged by an exchange

Not deductible against a gain. Withdrawing to your own wallet is a self-transfer. The fee is a real cost, but not one s.38 recognises.

Network fees on a purchase from a DEX

Deductible as part of the acquisition cost (s.38(1)(a)), for the same reason gas on a swap-out is deductible on the disposal side.

Spread on a broker like Revolut or a card provider

Generally not separately deductible — but you do not need it to be. If the platform quotes you an all-in price with the spread built in, that all-in price is your acquisition cost or your disposal proceeds. Only explicitly itemised fees are deducted on top.

Subscription fees, portfolio trackers, tax software

Not deductible for CGT. They are not incurred to acquire or dispose of any particular asset. The cost of preparing your computation might look like "valuation" under s.38(2), but HMRC's long-standing position in the Capital Gains Manual (CG15250 onwards) is that general accountancy and tax-return costs are not allowable against gains. Software like cryptolens.uk is a cost of compliance, not of disposal, and should not appear on your SA108.

Interest on a crypto-backed loan

Not deductible for CGT. Interest is a cost of borrowing, not of acquiring or disposing.

Worked example

You buy 1 ETH on an exchange for £2,500 with a £10 trading fee. You withdraw it to your own wallet, paying a £3 withdrawal fee in ETH. You later swap it on a DEX for USDC when ETH is worth £3,200, paying £6 of gas in ETH.

The £3 withdrawal fee is the one people want to deduct and cannot. It changes the answer by £3 here; across a year of moving tokens between wallets and chains it can be hundreds of pounds that HMRC would disallow on enquiry.

Record what you need

For each fee, keep the date, the sterling value on that date, the transaction it relates to and what the fee was for. The CSV exports from Coinbase, Kraken and Binance itemise trading fees. For on-chain activity the block explorer shows the gas in native token; you need a price on the day to convert it. The record-keeping guide covers how long to keep all this.

Summary table

This is general information, not personal tax advice.