A bad year in crypto is not just painful — it can be valuable. Losses reduce your taxable gains and can be carried forward indefinitely. But only if you tell HMRC about them. A loss year you ignore is a loss year wasted.
What counts as a capital loss?
A loss arises when you dispose of a cryptoasset for less than your allowable cost. The allowable cost includes what you paid for the asset plus any transaction fees directly associated with buying and selling it.
Example: netting gains and losses
You sold BTC for a gain of £8,000. In the same year you sold ETH at a loss of £5,500. Net gain: £2,500 — below the £3,000 annual exempt amount. No CGT due. But you still need to report if proceeds exceeded £50,000.
If instead your losses were £9,000, you have a net loss of £1,000. That loss carries forward to offset future gains.
How to claim losses on your Self Assessment
Losses must be actively claimed — they do not apply automatically. Report them on form SA108 (Capital Gains Summary):
- —Current-year losses offsetting current-year gains: reduce the figure in box 3 — include losses in box 4
- —Losses carried forward to future years: declare them in box 7 (losses not used this year)
- —Losses brought forward from earlier years used this year: report in box 5
You must file SA108 and claim the loss within 4 years of the end of the tax year in which it arose. Losses from 2021/22 must be claimed by 5 April 2026. After that, they are permanently lost — you cannot claim them retrospectively.
Negligible value claims and failed projects
If a crypto asset has become worthless — a project failed, an exchange collapsed, or tokens are permanently inaccessible — you may be able to make a negligible value claim to crystallise the loss without a sale. This creates a deemed disposal at the date of the claim.
The requirements are specific: you need evidence the asset is genuinely worthless (not just temporarily very low in value) and the claim must be made while you still hold the asset. HMRC considers claims on a case-by-case basis — professional advice is recommended before making one.
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Frequently asked questions
Do I need to file Self Assessment if I only made losses and no gains?
You should report losses on SA108 even in a year with no gains, to preserve them for future use. However, if your total proceeds are below £50,000 and you have no other Self Assessment obligations, you may not be required to file — though doing so locks in the loss claim. Check whether filing is mandatory for your situation.
Can I carry crypto losses back to a previous year?
No. CGT losses can only be carried forward, not back. If you have £20,000 of losses in 2024/25 but large gains in 2023/24, you cannot apply the 2024/25 losses against the earlier year. Losses offset future gains only.
My crypto exchange went bust. Can I claim a loss on funds I can't access?
Possibly. If the exchange has entered administration and it is clear you will not recover the funds, a negligible value claim may be available. You will need evidence of the insolvency and that recovery is not expected. This is a complex area — seek professional advice.
I lost my crypto to a scam. Does that count as a loss?
Losses from fraud or theft do not automatically qualify as capital losses. You may be able to make a negligible value claim if the assets are genuinely irrecoverable, but HMRC scrutinises these claims carefully and requires supporting evidence. Professional advice is essential.
Can I use crypto losses against gains on shares or property?
Yes. Capital losses from crypto disposals can be offset against any capital gains in the same year, including gains on shares, investment property (not your main home), and other capital assets. The offset is not limited to crypto gains.
Do the matching rules (same-day and 30-day) apply to loss-making disposals?
Yes. The matching rules apply to all disposals regardless of whether they result in a gain or a loss. A sale matched against a same-day repurchase at a lower price could produce a loss — but that loss must be calculated using the correct matching rule, not the Section 104 pool average.
General information only. Consult a qualified adviser for loss claims and negligible value elections.