Crypto Losses UK: How to Claim Them and Carry Them Forward

You can claim a crypto loss in the UK by reporting it to HMRC, and it reduces your Capital Gains Tax bill. Losses are set against gains from the same tax year first, and any unused loss is carried forward to later years. You have four years from the end of the tax year to report a loss, so losses from 2022/23 must be claimed by 5 April 2027. Lost keys and theft are treated differently: neither is a disposal, and only a negligible value claim can turn worthless tokens into a loss. This guide explains each rule with exact worked examples.

What counts as a crypto loss for tax?

A loss arises when you dispose of crypto for less than its allowable cost. "Dispose" means selling, swapping into another token, spending it or giving it away to someone other than your spouse or civil partner. The cost is your share of the section 104 pool (or the matched same-day or 30-day purchase), plus allowable fees.

A price fall on tokens you still hold is not a loss for tax. The loss is only recognised when you dispose of them, or when a negligible value claim treats you as having done so. Our guide to when you pay tax on crypto lists what counts as a disposal.

How are crypto losses used against gains?

In this order, as GOV.UK and HMRC's SA108 notes describe:

1. Losses in the same tax year are deducted from that year's gains first, in full.
2. The annual exempt amount (£3,000 for 2026/27) applies to what is left.
3. Losses from earlier years are then used only to reduce your gains down to the annual exempt amount. GOV.UK says that if they reduce your gain to the tax-free allowance, you carry forward the rest.

Worked example: carrying a loss forward. In 2025/26 you buy 4 ETH for £12,000 and sell them for £4,000, an £8,000 loss you report on your return. In 2026/27 you sell 1 BTC bought for £10,000 for £20,000: a £10,000 gain, with £20,000 of taxable income.

• You use £7,000 of the £8,000 to bring the £10,000 gain down to £3,000.
• The £3,000 annual exempt amount covers the rest, so the tax is £0.
• The other £1,000 of loss is carried forward.

The loss is deliberately not used in full: using all £8,000 would waste £1,000 of the year's allowance, so the rules stop at the allowance. Our guide to the 2026/27 rates and allowances has more examples.

Does the 30-day rule affect crypto losses?

Yes, and this is the most common way a "harvested" loss disappears. If you buy the same token on the same day as a sale, or within the 30 days after it, the sale is matched with that purchase and not your pool.

Worked example. Your pool holds 10 ETH costing £20,000. On 10 February 2027 you sell all 10 ETH for £15,000.

In the first row the sale is matched with the new purchase, so only £1,000 of loss is recognised, and the original £20,000 cost stays in your pool for later. In the second, the purchase is on day 31, outside the window, so the full £5,000 loss is recognised. Our section 104 pool guide explains the matching rules step by step.

How do you claim a crypto loss?

You claim a loss by reporting it:

• On your Self Assessment return. Losses in the year go in box 13.5 of the SA108 Cryptoassets section; losses brought forward and used go in box 45, and unused losses to carry forward in box 47. See how to report crypto on your tax return.
• In writing to HMRC, if you have never made a gain and are not registered for Self Assessment. GOV.UK says you can write to HMRC instead.

GOV.UK says you do not have to report a loss straight away, and you can claim up to four years after the end of the tax year you disposed of the asset. That deadline is real: a loss from 2022/23 (year ended 5 April 2023) can be claimed until 5 April 2027, and after that it is lost. Reporting a loss early also secures it for carry-forward. Keep the records behind it: HMRC expects the date, quantity and sterling value for every transaction.

Who can you not claim a loss against?

GOV.UK sets out limits that catch some crypto users:

• A spouse or civil partner. Transfers to a spouse are no gain, no loss, so you cannot claim a loss on them.
• Family and connected people. You cannot deduct a loss from giving, selling or disposing of an asset to a family member (brothers, sisters, parents, grandparents, children and grandchildren, and their spouses, and business partners) unless you are offsetting a gain from the same person.

Selling to a friend at a low price or gifting to a relative does not create a usable loss in the way a sale on an exchange does. Our guide to gifting crypto covers gifts.

What is a negligible value claim for crypto?

If tokens you still own become worthless, or worth next to nothing, you can crystallise a loss without selling. HMRC's Cryptoassets Manual (CRYPTO22500) says the claim treats you as disposing of and immediately reacquiring the tokens at the amount you state. It must say:

• the asset the claim is about
• the amount you should be treated as disposing of it for, which can be £nil
• the date you should be treated as disposing of and reacquiring it

Because crypto is pooled, HMRC says the claim must cover the whole section 104 pool of that token, not individual tokens. HMRC's Capital Gains Manual adds that "negligible" is not defined but means "worth next to nothing", that the asset must still exist when you claim, and that the general rule is that the deemed disposal date is the date HMRC receives the claim, though an earlier date can be claimed in some circumstances. You must also notify the loss to HMRC in addition to making the claim; both can go on the same return.

What about lost private keys, theft and fraud?

• Lost keys. Misplacing a private key is not a disposal, HMRC says (CRYPTO22400), because the tokens still exist. If there is no prospect of recovering the key, a negligible value claim can crystallise the loss.
• Theft. HMRC does not treat theft as a disposal, because you still own the stolen asset and have a right to recover it, so victims of theft cannot claim a capital loss (CRYPTO22450).
• Fraud and scams. If you paid for tokens but never received them, you may not be able to claim a loss. If you did receive tokens and they became worthless, you may be able to make a negligible value claim, unless they were worthless when you acquired them.
• Failed platforms. How a collapsed exchange affects your claim depends on the facts. Get advice before claiming.

What if you have missed a loss claim, or HMRC has written to you?

If a year is outside the four-year window, the loss cannot be used, so check the dates now. If you have unreported gains from earlier years, you must correct the position rather than net it against losses you have not reported. See our disclosure guide, or use the HMRC crypto letter helper if you have had a letter.

Sources

• Capital Gains Tax: if you make a loss — GOV.UK
• Check if you need to pay tax when you sell cryptoassets — GOV.UK
• CRYPTO22500 — S24 and negligible value — HMRC Cryptoassets Manual
• CRYPTO22400 — Losing private keys — HMRC Cryptoassets Manual
• CRYPTO22450 — Being defrauded — HMRC Cryptoassets Manual
• CG13125 — Negligible value — HMRC Capital Gains Manual
• CG13130 — Date of deemed disposal or reacquisition — HMRC Capital Gains Manual
• Capital Gains Tax summary notes 2025 to 2026 — HMRC