Key takeaways
- A price fall is not a loss. You need a disposal at a loss, and you have to claim the loss from HMRC before it counts.
- Losses made in 2025/26 must be claimed within four years of the end of the tax year, so by 5 April 2030.
- Same year losses come off that year's gains in full, brought forward losses only reduce gains to the £3,000 annual exempt amount, and the rest carries forward.
- A negligible value claim covers the whole section 104 pool, not individual tokens, and must state the asset, the amount and the date.
- HMRC says theft is not a disposal, but the page it cites allows a negligible value claim where there is no likelihood of recovery and no insurance.
A crypto loss only reduces your tax bill if you dispose of the tokens at a loss and then claim the loss from HMRC. A fall in price on its own does nothing. Once claimed, the allowable loss comes off your gains for the same tax year first, and anything left is carried forward indefinitely. For a 2025/26 loss you have until 5 April 2030 to claim it.
When a crypto loss is an allowable loss
A loss arises on the same events that create a gain. CRYPTO22100 treats selling tokens for money, exchanging them for a different type of token, using them to pay for goods or services, and giving them away other than to a spouse or civil partner as disposals. If the proceeds are less than the allowable cost of the tokens coming out of your section 104 pool, that difference is a capital loss.
Two points follow from the pooling rules in CRYPTO22200. Selling at a loss and buying back within 30 days does not bank the loss: the repurchase is matched to the disposal, so you compare your sale proceeds with what you paid on the way back in. And because each token type has one pool, the loss is computed on the pooled average cost, not on the coins you think you sold.
Losses on disposals to connected people are restricted. You cannot claim a loss on tokens you gave or sold to your spouse or civil partner, and a loss on a disposal to another connected person can only be set against gains on disposals to that same person (GOV.UK).
You have to claim a loss, and there is a time limit
HMRC does not pick losses up from your records. You claim a loss by including it on your tax return; if you have never made a gain and are not registered for Self Assessment, you can write to HMRC instead. The time limit is four years after the end of the tax year in which you disposed of the asset, so a loss made in 2025/26 has to be claimed by 5 April 2030.
That is a claim deadline, not a using deadline. You do not have to use the loss in the year you claim it, and an unclaimed loss from an earlier year is often the cheapest thing to fix before a return goes in. Claiming a loss is also one of HMRC's reasons for filling in the capital gains pages at all, even with no tax to pay.
Same year first, then carried forward
The order is fixed, and it is not always in your favour:
| Step | What happens |
|---|---|
| 1 | Losses of the same tax year are deducted from that year's gains, in full, even if that wastes part of your £3,000 annual exempt amount |
| 2 | Losses brought forward from earlier years are used only to bring the remaining gains down to the annual exempt amount, not below it |
| 3 | Anything unused carries forward to a future tax year, with no time limit on using it |
So if you have £2,000 of gains and £2,000 of crypto losses in 2025/26, the losses cancel the gains and the annual exempt amount does nothing for you. If you have £20,000 of gains this year and £30,000 of losses brought forward, you use £17,000 of the brought forward losses to leave £3,000 covered by the allowance, and £13,000 carries on to next year. Source: GOV.UK losses guidance and the SA108 notes.
Worthless tokens: the negligible value claim
If a token has collapsed to nothing but still exists in your wallet, there has been no disposal, so there is no loss to claim. The route out is a negligible value claim. CRYPTO22500 says individuals can crystallise losses for tokens they still own if those tokens become worthless or of negligible value while owned, and that the claim treats the tokens as disposed of and immediately reacquired at an amount stated in the claim.
The manual is specific about two things. Because tokens are pooled, the claim has to be made in respect of the whole section 104 pool, not individual tokens. And the claim must state:
- the asset which is the subject of the claim
- the amount the asset should be treated as disposed of, which may be £nil
- the date it should be treated as disposed of and immediately reacquired
The resulting loss still has to be reported to HMRC, though the claim and the loss can go in together. Beyond that the Cryptoassets Manual is short and points to the general guidance at CG13120P, so the detail comes from there. CG13125 says there is no requirement to claim within a specified time of the asset becoming of negligible value, but you must still own the asset when you claim: if it has ceased to exist the claim will not succeed. It also records that 'negligible' is not defined in the legislation and that HMRC takes it to mean worth next to nothing.
On timing, CG13130 gives the general rule that the deemed disposal happens on the date HMRC receives the claim, with section 24(2) TCGA 1992 setting the conditions for choosing an earlier date. HMRC's helpsheet HS286 puts that earlier time at up to two years before the start of the tax year in which you make the claim, provided you owned the asset then and it had already become of negligible value by then. A claim sent with a return on 31 January 2027 could therefore reach back to 6 April 2024, but a claim delayed to 1 May 2027 could only reach 6 April 2025.
Lost private keys
HMRC's position in CRYPTO22400 is that misplacing a private key does not count as a disposal for Capital Gains Tax. The reasoning is that the key still exists as part of the cryptography and the tokens still exist on the distributed ledger, even though you cannot reach them.
The manual then qualifies that: if it can be shown there is no prospect of recovering the private key or accessing the tokens, a negligible value claim could be made, and if HMRC accepts it you are treated as having disposed of and reacquired the tokens, so the loss crystallises. Note the wording. It is 'could', not 'can', the burden of showing there is no prospect of recovery sits with you, and HMRC has to accept the claim. Contemporaneous evidence of the wallet, the balance and what happened is what makes that argument.
Scams, theft and tokens you never received
This is the part most often repeated wrongly, so read CRYPTO22450 closely. It draws three lines:
| Situation | What HMRC's manual says |
|---|---|
| Tokens stolen from you | Theft is not a disposal, because you still own the stolen asset and have a right to recover it, so victims of theft cannot claim a loss for Capital Gains Tax |
| You paid for tokens and never received them | You may not be able to claim a capital loss |
| You received tokens that later became worthless | You may be able to make a negligible value claim, unless the tokens were worthless when you acquired them |
The theft line is qualified by the very page the manual cites. CG13155 says that where there is no likelihood that the asset will be recovered, a negligible value claim under section 24(2) would be competent, and that this would not apply where the loss has been covered by insurance. So 'no loss for theft' is the starting position rather than the end of it, and it turns on whether recovery is realistic and whether you have been compensated.
The middle line matters for rug pulls and fake exchanges. HMRC says 'may not', not 'cannot', so where you paid and got nothing the outcome depends on what you actually acquired, if anything. Where you did receive tokens that then went to zero, you are in negligible value territory, and CRYPTO22450 adds that a claim is not allowed if the tokens were worthless when acquired. Disposing of them by other means remains open as a way to crystallise the loss.
Where losses go on the 2025/26 return
Crypto losses go in the cryptoasset section of the SA108, then into the losses section:
| Box | What goes in it |
|---|---|
| 13.5 | Losses in the year on cryptoasset disposals |
| 13.6 | The 3 letter code for a claim or election, explained in your computation |
| 45 | Losses brought forward and used in the year |
| 46 | Income losses of 2025/26 set against gains |
| 47 | Losses available to be carried forward |
The SA108 also says you must enclose your computations, including details of each gain or loss, as well as filling in the boxes. Our guide to reporting crypto on Self Assessment walks through the rest of the cryptoasset boxes.
What this means for your 2025/26 return
The 2025/26 return is due online, with the tax, by 11:59pm on 31 January 2027. Two things are worth doing before then. Check whether a dead token in your wallet is a negligible value candidate, because the deemed disposal date depends on when the claim lands. And check for losses from earlier years that were never claimed, since anything from 2021/22 onwards is still inside the four year window.
If the year also involved staking or lending, read our guides on staking and UK tax and DeFi tax, because a capital loss cannot be set against that income. Broader context is in crypto tax in the UK, when you pay tax on cryptocurrency and our Capital Gains Tax guide.
Get your losses claimed properly
GoForma's ACCA and AAT qualified accountants file crypto Self Assessment returns for £298 plus VAT, including a Koinly licence for up to 25,000 transactions, gains and losses worked out across every exchange and wallet you have used, and the full return filed. A Self Assessment return without crypto is £198. We are rated 4.9 on Google from 72 reviews and have filed more than 7,000 tax returns. See our crypto tax accountants page, our crypto Self Assessment service, or book a free consultation.
