The annual CGT allowance has been cut by 76% in two years. Many crypto investors who had no tax liability in 2022 now do — not because they traded differently, but because the tax-free threshold has shrunk dramatically around them.
How the allowance has changed
| Tax year | Annual CGT allowance | Tax on £10,000 gain (basic rate) |
|---|---|---|
| 2022/23 | £12,300 | £0 |
| 2023/24 | £6,000 | £720 |
| 2024/25 | £3,000 | £1,260 |
| 2025/26 | £3,000 | £1,260 |
The reduction from £12,300 to £3,000 means someone with a £10,000 gain that was fully covered by the allowance in 2022/23 now owes £1,260 in tax (basic rate) or £1,680 (higher rate).
How the £3,000 allowance actually works
The allowance applies to your net gain — total gains minus total losses across all assets in the year. If you made £8,000 on BTC but lost £4,000 on ETH, your net gain is £4,000. After the £3,000 allowance, only £1,000 is taxable.
The £3,000 is shared across all capital gains — crypto, shares, second properties (not your main home). If you also sold shares or other assets at a gain, those count toward the same allowance. Many people don't realise their crypto allowance has already been used by share sales.
CGT rates for 2024/25: 18% for basic rate taxpayers, 24% for higher or additional rate taxpayers. If you are close to the higher rate threshold, some of your gain may be taxed at 18% and the rest at 24%.
Strategies to make use of the allowance
The allowance cannot be carried forward — each year it resets. Some straightforward approaches to use it effectively:
- —Realise gains up to the allowance each year rather than letting them accumulate
- —Transfer assets to a spouse before disposal — they can use their own £3,000 allowance
- —Match gains with losses in the same year to reduce the taxable amount
- —Plan large disposals across two tax years (sell some before 5 April, the rest after 6 April)
The reporting threshold even when no tax is due
If your total disposal proceeds (not gains) exceed £50,000 in the year, you must file a Self Assessment and complete form SA108 — even if your net gain is below £3,000. This catches active traders who make many small-gain transactions.
Frequently asked questions
What is the CGT allowance for 2025/26?
The annual CGT exempt amount remains £3,000 for 2025/26. There are no confirmed plans to increase it. Gains above £3,000 are taxed at 18% (basic rate) or 24% (higher rate).
Can I use my partner's allowance for my crypto gains?
Not directly — the allowance is individual. However, you can transfer crypto to a spouse or civil partner as a no-gain, no-loss disposal, and they can then use their own £3,000 allowance when they dispose of it. This requires the transfer to be a genuine gift, not a loan.
Do I get a separate allowance for crypto and shares?
No. The £3,000 annual CGT allowance covers all capital gains in a tax year — crypto, shares, investment property (not main home), and other assets. All gains count toward the same single allowance.
What happens if I don't use my full allowance in a year?
You lose it. The annual CGT exempt amount cannot be carried forward. If your gains are below £3,000 in a year, the unused allowance is simply wasted. This is why planning disposals to use the allowance each year can be tax-efficient.
If my gain is below £3,000 do I still need to tell HMRC?
Not necessarily — unless your total disposal proceeds exceed £50,000, or you are already registered for Self Assessment for other reasons. If both thresholds are below the limit, you have no legal obligation to report, but you should keep records.
How do losses interact with the allowance?
Losses are deducted from gains before the allowance is applied. So if you have £10,000 of gains and £6,000 of losses, your net gain is £4,000. After the £3,000 allowance, only £1,000 is taxable. You must report losses on SA108 in the year they arise to preserve them.
General information only. Rates and allowances can change. Consult a qualified adviser.