Cryptocurrency Purchase Guide For UK Residents
Cryptocurrency purchase guide for UK residents
The cheapest way to buy Bitcoin in the UK is through a crypto exchange, such as eToro or Coinbase. Look for a platform with transparent fees and good customer support. Make sure that the platform is regulated and compliant with UK laws. You should also choose a crypto exchange that offers multiple payment methods, including bank transfers and digital currencies. It is important to note that cryptocurrencies are highly volatile, and you may lose all or part of your investment. Find out https://www.theinvestorscentre.co.uk/crypto/how-to-buy-cryptocurrency/
There is no specific Bitcoin tax or cryptocurrency tax in the UK, but your crypto assets might be subject to either Income Tax or Capital Gains Tax depending on the particular transactions you make with your coins and tokens. In the case of the former, you’ll be taxed on the income you earn by selling, trading or spending your cryptos, while in the latter case you’ll be taxed on any profit you make when disposing of your cryptos (including mining or staking rewards).
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HMRC has made it clear that the method used to calculate your cryptocurrency cost basis needs to be different from the one applied to other types of investments. It must be based on ‘share pooling’, which prevents investors from manipulating their gains and losses by buying and selling assets over short periods of time to manipulate the cost basis.
You will need to keep track of your purchases, sales and disposals by downloading reports from your exchanges on a regular basis, or using a blockchain software like Koinly. Then, when it’s time to file your Self Assessment Tax Return, you can use this information to fill in the relevant fields.
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