UK crypto losses for 2025/26: claims, matching and carryforward

A UK individual who disposes of exchange tokens held as an investment can realise an allowable capital loss. Current-year allowable losses are used against current-year gains before unused amounts are carried forward; brought-forward losses are normally used only as needed after the annual exempt amount. For 2025/26 that annual exempt amount remains £3,000 for individuals. The loss must be computed under the same-day, 30-day and Section 104 pooling rules and notified to HMRC within the normal claim time limit. A price collapse, theft or lost private key is not automatically a disposal, although a valid negligible-value claim may crystallise a loss in qualifying facts.

A capital loss starts with a recognised disposal

HMRC generally treats exchange tokens held as an investment as chargeable assets. Selling for sterling, exchanging one token for another, spending tokens or giving them to someone other than a qualifying spouse/civil partner can create a disposal. The allowable loss is computed using sterling proceeds and allowable costs under the Capital Gains Tax rules.

Costs already deducted against income cannot also reduce a capital gain. Allocate acquisition price, transaction fees and valuation expenses under the applicable rules once. The UK crypto tax guide explains the capital-versus-trading distinction.

Same-day, 30-day and Section 104 matching determine the loss

UK crypto calculations do not use FIFO. Disposals of tokens of the same class are matched first with acquisitions on the same day, then acquisitions in the following 30 days, and then the pooled Section 104 holding. Buying back after a loss can therefore change which cost is matched without a US-style wash-sale adjustment.

The Section 104 pool records total pooled units and allowable cost for each token class. Own-wallet transfers do not create a second pool for the same beneficial owner. A missing exchange history can corrupt the pool years later, so the engine needs transactions before the tax year.

Matching example

An investor disposes of 1 ETH for £1,200 when the historic Section 104 average cost appears to be £2,000. Five days later the investor buys 1 ETH for £1,300. The disposal is matched to the 30-day acquisition rather than immediately to the older pool, producing a simplified £100 loss before fees. The old pooled unit remains. Reporting an £800 loss from the dashboard would be wrong.

• process same-day acquisitions first;
• look forward 30 days from every disposal;
• use the Section 104 pool only for the remaining quantity;
• update pooled quantity and allowable cost after each event;
• apply the rules separately by token class and beneficial owner.

Current-year losses, annual exempt amount and carryforward

Allowable losses arising in the tax year are deducted from chargeable gains of that year, even where this takes net gains below the annual exempt amount. Unused current-year losses carry forward after they have been notified. Brought-forward losses are generally used only to reduce gains to the annual exempt amount, preserving any remaining balance.

For individuals, the Capital Gains Tax annual exempt amount is £3,000 in both 2025/26 and 2026/27. It is not a loss allowance and cannot be carried forward. The final CGT rate depends on the taxpayer's income and applicable rate; the loss schedule should not estimate tax without the whole return.

Carryforward example

An individual has £12,000 of gains and £15,000 of current-year allowable losses in 2025/26. The current-year losses reduce gains to nil and £3,000 remains to carry forward once properly claimed. If a later year has £5,000 of gains and a £3,000 annual exempt amount, brought-forward losses are normally used only to reduce gains to £3,000, leaving £1,000 carried forward. This simplified example assumes no other adjustments.

Capital losses generally do not reduce salary, staking income or miscellaneous income. A genuine trading business follows income-tax trading-loss rules, but HMRC says only exceptional crypto activity amounts to a financial trade. See the UK DeFi guide for receipt income.

Negligible-value claims, lost keys, theft and failed platforms

HMRC CRYPTO22400 states that misplacing a private key is not itself a disposal because the key and tokens still exist. If there is no prospect of recovering access, the individual may consider a negligible-value claim. If accepted, HMRC treats the tokens as disposed of and reacquired at negligible value, potentially crystallising a loss.

A negligible-value claim requires the asset still to exist and be owned, to have become worth next to nothing and to satisfy the claim conditions. The taxpayer must also notify the resulting loss. A low market price is not automatically “negligible,” and an insolvent exchange balance may be a claim against the platform rather than the original token.

Theft does not necessarily change beneficial ownership or constitute a disposal for no proceeds. Record police reports, insolvency documents, wallet evidence and recovery prospects. Software should mark the item for review rather than manufacture sale proceeds of zero.

1. identify the legal asset still owned;
2. document why recovery is impossible or value is negligible;
3. choose a claim date permitted by the rules;
4. calculate the deemed disposal using the matching/pool rules;
5. notify both claim and quantified loss to HMRC;
6. retain evidence of any later recovery.

Notify the loss and keep the calculation

HMRC's capital-gains manual says a loss is generally allowable only when notified in a quantified amount within the normal claim time limit. Including it in the Self Assessment return and supporting computation can constitute notice; there is no special universal crypto loss form. The normal time limit is generally four years after the end of the tax year, so a 2025/26 loss normally needs notification by 5 April 2030.

Carryforward schedules should show opening losses, current-year losses, amounts used and closing balance. Do not rely on HMRC to reconstruct a loss omitted from old returns. The UK filing guide explains the Capital Gains Tax summary.

Consolidate every platform using the UK exchange-report guide. Retain transaction hashes, sterling valuations, pool calculations, fee allocation, wallet ownership and claim correspondence.

Frequently asked questions

Official HMRC sources

• HMRC Cryptoassets Manual: individuals and Capital Gains Tax
• HMRC CRYPTO22400: lost private keys
• HMRC Capital Gains Manual: notifying allowable losses
• HM Treasury: 2025/26 and 2026/27 CGT annual exempt amount

Reviewed 1 September 2026. This is a supporting calculation guide, not an individual loss claim.

Disclaimer: This article is for general informational purposes only and does not constitute tax advice. For individual tax advice, consult a licensed tax professional.