Crypto Loss Harvest UK CGT 2025/26

What loss harvesting is

Loss harvesting is the deliberate crystallisation of an unrealised capital loss so it can be set against current-year gains, cutting your Capital Gains Tax (CGT) bill. The losses must be real disposals at arm's length — you cannot just mark down a holding on paper.

Crypto is unusually well-suited to loss harvesting because:

1. Volatility — many wallets hold tokens 50–90% below cost.
2. Liquid markets — most majors can be sold and converted in seconds.
3. No wash-sale rule as strict as the US — you must avoid the 30-day same-asset window, but a switch into a different token (or even a different chain wrapping the same asset) breaks the link.

The 2025/26 CGT framework for crypto

HMRC's Cryptoassets Manual CRYPTO22000 confirms tokens are chargeable assets — same treatment as shares — unless you are running a crypto trading business, which is very rare.

The mechanics: how to harvest a loss correctly

1. Identify positions in loss. Pull a portfolio snapshot from your exchange or wallet showing cost basis vs current value.
2. Calculate cost basis using Section 104 pooling. Each token (e.g. all your BTC) is treated as a single pooled asset with a weighted-average cost.
3. Sell the loss position to a different token or to fiat. The disposal is a "chargeable event" creating a loss.
4. Avoid the 30-day rule. Do not repurchase the same token within 30 days, or HMRC will match the repurchase against the sale and you'll lose the loss.
5. Record the disposal date, proceeds, cost, and resulting loss.
6. Claim on Self Assessment (SA108 capital gains pages) within 4 years.

Worked example — Aisha, £8,000 crypto loss vs share gain

Aisha, a higher-rate taxpayer, has:

• £15,000 of realised gains on Tesla shares she sold in November 2025.
• £20,000 cost basis in SOL, now worth £12,000. Loss available: £8,000.

She sells the SOL in March 2026 and rotates the proceeds into BTC (different asset — 30-day rule not triggered).

Without the harvest: £15,000 − £3,000 = £12,000 × 24% = £2,880.

CGT saved: £1,920.

Worked example — basic-rate taxpayer with property gain

Tom, basic-rate, sold a buy-to-let with £25,000 of gain. He also has an old ETH stash worth £6,000 against a £14,000 cost basis (loss available: £8,000).

Tom is basic-rate, but property gains are taxed at 18% basic / 24% higher. His unused basic-rate band determines how much falls in each:

• Salary £40,000; basic-rate band runs to £50,270. £10,270 of headroom.
• £10,270 of gain at 18% = £1,848.60.
• £3,730 at 24% = £895.20.
• Total CGT: £2,744.

Without harvest: £22,000 taxable, CGT = £10,270 × 18% + £11,730 × 24% = £4,664.

CGT saved: £1,920.

For the wider mechanics of property CGT see CGT on second homes and BTL.

The 30-day rule — the trap that ruins most harvests

Section 106A TCGA 1992 ("bed and breakfasting" rule) says that if you sell an asset and buy back the same asset within 30 days, the repurchase is matched against the sale before the Section 104 pool. The result: your loss is effectively cancelled.

Crypto-specific points:

• Same token only. ETH on Ethereum and ETH on Arbitrum are the same asset for CGT. BTC and WBTC are arguably the same too (HMRC has not litigated this).
• A different token is fine. Sell SOL, buy AVAX — no link.
• Stablecoin parking (sell ETH, hold USDC for 31 days, rebuy ETH) breaks the link but exposes you to 31 days of price risk.
• DCA strategies can accidentally repurchase the same token within 30 days. Pause automated buys.

See ISA bed and breakfasting CGT for the share equivalent.

Negligible value claims — crashes, scams and exchange collapses

If a token is verifiably worthless (rug-pull, exchange in liquidation, project abandoned with no liquidity), you can make a negligible value claim under s.24(2) TCGA 1992. The loss crystallises on the date HMRC accepts the claim, even though you still nominally hold the token.

Common acceptable cases:

• Tokens delisted from all major exchanges with no recoverable market.
• Wallets locked in a collapsed exchange (Celsius, FTX) where the administrator has confirmed creditors get a fraction of value.
• Stolen tokens (with police report).

Not acceptable:

• Tokens that have just fallen a lot but still trade.
• Hard forks where you still hold the original chain.

Step-by-step claim on Self Assessment

1. SA108 page CG 1: report total disposals and proceeds.
2. Losses section: enter the harvested loss.
3. Carry-forward: any unused loss carries to next year automatically, but must be claimed in writing within 4 years.
4. Keep records: transaction hashes, exchange CSVs, wallet addresses, GBP value at disposal.

See our Self Assessment Capital Gains guide for the form mechanics.

Common mistakes

1. Holding loss positions outside an ISA "to harvest later" when they could have been inside an ISA accumulating tax-free (crypto cannot, but shares can — see ISA tax-free returns).
2. Reporting only gains. HMRC requires disposal reporting if total proceeds exceed 4 × the AEA (£12,000 in 2025/26) even if there's no gain.
3. Forgetting GBP conversion. Every crypto-to-crypto trade is a disposal in GBP, even if no fiat changed hands.
4. Selling and re-buying within 30 days. Loss vanishes.
5. Missing the 4-year deadline. Losses not claimed in time cannot be carried forward.

When loss harvesting isn't worth it

• Total gains for year are below £3,000 — covered by the AEA, harvesting adds admin without saving tax.
• Loss is small relative to fees — exchange fees may eat the saving.
• You strongly believe the token will rebound within 30 days — the timing risk of being out of position outweighs the tax saving.

Try the calculator

Sources

• HMRC: Cryptoassets Manual CRYPTO22000
• HMRC: Capital Gains Tax rates 2025/26
• TCGA 1992 s.104 (pooling), s.106A (30-day rule), s.24(2) (negligible value)
• HMRC: Self Assessment SA108 Capital Gains summary