How to Claim Crypto Losses on Your UK Tax Return

If you have lost money on crypto, there is a silver lining: those losses can reduce your tax bill. But only if you report them correctly to HMRC.

Why reporting losses matters

Capital losses can be offset against capital gains in the same tax year, reducing or eliminating your CGT liability. If your losses exceed your gains, the excess can be carried forward indefinitely and used against future gains. But here is the catch: you must report losses to HMRC within four years of the end of the tax year in which they occurred, or you lose the ability to use them.

Realised vs unrealised losses

Only realised losses count. A token dropping 80% in value is not a loss until you sell it (or it becomes truly worthless). To crystallise a loss, you need to dispose of the token — sell it, swap it, or gift it. This is the basis of tax-loss harvesting.

How to report losses

Losses are reported on the Capital Gains supplementary pages (SA108) of your Self Assessment. You declare your total gains, total losses, and the net result. If you are not otherwise required to file a Self Assessment, you can write to HMRC to register your losses.

The 30-day rule

If you sell a token to crystallise a loss and rebuy the same token within 30 days, the loss is disallowed under the bed-and-breakfasting rule. The sale is matched against the repurchase, not the Section 104 pool. To claim the loss, you must wait at least 31 days before rebuying.

Worthless tokens

If a token has become genuinely worthless — the project has collapsed, the contract is abandoned, there is no liquidity — you can claim a negligible value claim. This allows you to treat the tokens as disposed of at zero value without actually selling them (which may be impossible if there is no market). You must be able to demonstrate the tokens are genuinely worthless.

Strategic loss harvesting

The end of the UK tax year (5 April) is the key date. Before this deadline, review your portfolio for tokens with unrealised losses. Selling them before 5 April allows you to offset the losses against any gains you have made in the same tax year. CryptoLens identifies tokens in your portfolio with unrealised losses automatically.