How to Claim Crypto Losses Against Tax in the UK (2025/26)

Lost money on crypto and wondering if at least it cuts your tax bill? It can. Handled properly, a loss is a deduction that lowers your Capital Gains Tax (CGT) bill, this year or in a future one. HMRC treats most crypto disposals (selling, swapping one coin for another, spending it, or gifting it to anyone other than your spouse) the same way it treats shares: gains are taxable, and losses are allowable and can be set against gains.

The catch is that a loss only counts once you've realised it (an actual disposal) and, in most cases, once you've claimed it. This guide walks through how losses offset gains, how to carry the unused part forward, the 4-year window to register a loss, and the special case of crypto that's become worthless or that you can no longer access. Figures are for the 2025/26 tax year (England, Wales and Northern Ireland; Scotland differs only for income tax, not CGT).

How do crypto losses offset my gains?

Capital losses are pooled with your other capital gains and losses for the year. You add up all your chargeable gains, subtract your allowable losses, and CGT is charged on what's left above the annual exempt amount (AEA), which is £3,000 for 2025/26. Crypto losses can be set against gains on any chargeable asset, not just other crypto (for example, a crypto loss can offset a gain on shares or a second property).

The order matters, and there's one trap most people miss. Losses from the same tax year must be set against that year's gains in full, even if that pushes your net gain below the £3,000 AEA, effectively "wasting" some of the allowance. By contrast, losses brought forward from earlier years are only used to bring your gains down to the AEA, never below it, so brought-forward losses never waste your allowance, and any excess simply carries forward again.

Anything left over after offsetting above the basic-rate band is taxed at 24%; the part of the remaining gain that falls within your unused basic-rate band is taxed at 18%. See the crypto tax rates guide for how the 18%/24% split works.

How do I carry losses forward, and what's the 4-year deadline?

If your allowable losses for a year exceed your gains, the unused amount is carried forward indefinitely to set against gains in future years. There's no expiry on a loss once it's in the system. But it only enters the system if you claim it, and there's a deadline to do that.

You have up to 4 years after the end of the tax year in which you disposed of the asset to notify HMRC of a loss. For a loss realised in 2025/26 (tax year ending 5 April 2026), that means you must claim it by 5 April 2030. Miss the window and the loss is generally lost for good, so it pays to log losing trades even in a year you have no gains to use them against.

You claim a loss by entering it on the Capital Gains Summary (SA108) pages of your Self Assessment return. Crypto now has its own section, boxes 13.1–13.8 (see the SA108 boxes guide). If you've never made a gain and aren't registered for Self Assessment, you can instead write to HMRC to register the loss. Keep your workings: the running cost of each coin comes from your Section 104 pool, and HMRC can ask to see how you calculated the loss.

Can I claim a loss on worthless or lost crypto?

Sometimes there's no buyer to sell to: a token has collapsed to nothing, or you've lost access to your wallet. UK rules treat "worthless" and "lost access" very differently, and getting this wrong is a common mistake.

Worthless tokens (a collapsed project): if crypto you still own has become of negligible value ("worth next to nothing"), you can make a negligible value claim. If HMRC accepts it, you're treated as having sold and immediately re-bought the tokens at their (near-zero) value, which crystallises the loss without an actual sale. Two conditions matter: the asset must still exist and still be owned by you when you claim (being delisted from an exchange is not the same as the token ceasing to exist; what matters is that it has genuinely become worth next to nothing), and because crypto is pooled, the claim must be made over the whole Section 104 pool for that token, not individual coins. Whether something genuinely qualifies as "negligible value" is fact-dependent and HMRC must accept it, so document the evidence (delisting notices, dead project, no trading market).

Lost private keys / lost wallet: losing your keys is not, by itself, a disposal for CGT. HMRC's view is that the private key and the tokens "still exist" on the blockchain (you just can't reach them), so there's no automatic loss. However, if you can show there's no realistic prospect of ever recovering the key or accessing the tokens, you may be able to make a negligible value claim on the same basis as above. This is genuinely a judgement call by HMRC, so treat it as fact-dependent rather than a guaranteed write-off.

Do I still need to report a loss-making year?

Even in a year you owe no CGT, you may still need to file. You must report through Self Assessment if your total gains exceed £3,000 OR your total disposal proceeds exceed £50,000 in 2025/26, and proceeds are measured before deducting costs, so a busy year of trading can cross the £50,000 line even at an overall loss.

Beyond the thresholds, there's a practical reason to report losing years: a loss only becomes usable once claimed within the 4-year window. For the 2025/26 year, you register by 5 October 2026 if you're new to Self Assessment, and file and pay online by 31 January 2027. The UK is now rolling out the Crypto-Asset Reporting Framework (UK platforms collect user and transaction data from 1 January 2026, with first reports to HMRC due by 31 May 2027), so it's safest to assume HMRC can see your activity and to report accurately, claiming the losses you're entitled to. You can sanity-check your gains, losses and pools with our free calculator, and read how the numbers are built on the methodology page.

A note on uncertainty

The core rules above are well-settled. Some edges are not: whether a specific dead token qualifies as "negligible value", whether a lost-key situation truly has "no prospect of recovery", and the treatment of some DeFi losses (e.g. liquidity-pool or lending losses) can be fact-dependent, and HMRC decides case by case. Where your situation is material or unusual, treat this guide as a starting point and consider a qualified UK tax adviser rather than relying on a hard rule. If you want the bigger picture of how it all fits together, the complete UK crypto tax guide walks through how UK crypto tax works from start to finish.

Sources

• GOV.UK, Capital Gains Tax: if you make a loss (offset, carry forward, 4-year claim)
• HMRC HS227, Losses (Self Assessment helpsheet, 2025)
• HMRC CRYPTO22400, Capital Gains Tax: losing private keys
• HMRC CRYPTO22500, Capital Gains Tax: S24 and negligible value (whole pool)
• HMRC CG21500, Individuals: losses: assessment (same-year vs brought-forward)
• HMRC CG13125, Negligible value: introduction and conditions
• HMRC CRYPTO22000, Cryptoassets for individuals: Capital Gains Tax (contents)
• GOV.UK, Capital Gains Tax rates and allowances