UK Crypto Tax Guide 2025/26: Individual vs Limited Company Ownership

Cryptocurrencies like Bitcoin, Ethereum, and Solana have become mainstream assets, especially among millennials and Gen Z. However, while many UK investors focus on growth and price trends, crypto taxation is often overlooked and getting it wrong can be costly.

Whether you're trading, investing, staking, or earning crypto, this guide breaks down the UK tax rules for crypto and whether you're better off holding it as an individual or through a limited company.

Do You Pay Tax on Crypto in the UK?

Yes HMRC treats cryptocurrency as an asset, not as money. This means most transactions fall under Capital Gains Tax (CGT) rules, not income tax (though some income tax scenarios do apply).

You may owe tax when you:

• Sell crypto for fiat currency (e.g., GBP)

• Swap one crypto for another (e.g., ETH to ADA)

• Use crypto to pay for goods or services

• Gift crypto (other than to your spouse)

• Earn crypto through mining, staking, or airdrops

  
  

Crypto as an Individual (Sole Investor or Trader)

Tax Treatment:

• Capital Gains Tax (CGT) on profits from disposals

• Annual CGT allowance: £3,000 (2025/26)

• Rates: 18% (basic rate) or 24% (higher rate), depending on income

  
  

Income Tax applies if:

• You're paid in crypto (as salary or freelance)

• You mine, stake, or receive airdrops regularly

  
  

Pros:

• Simpler admin via Self-Assessment

• Access to CGT allowance

• No corporation or dividend tax to worry about

  
  

Cons:

• Limited tax planning flexibility

• Potentially higher tax if your income bracket pushes up your CGT rate

  
  

Holding Crypto in a Limited Company

Tax Treatment:

• Corporation Tax on profits (19%–25% depending on profits)

• No CGT allowance

• Income tax applies when you withdraw funds (as salary or dividends)

• Complex accounting rules may apply for valuation and impairment

  
  

Pros:

• Corporation tax rates often lower than CGT for high earners

• Can reinvest profits into the company without immediate personal tax

• Possibility of better long-term tax planning for crypto-heavy businesses

  
  

Cons:

• More admin and compliance

• Funds are locked in the company unless drawn via salary/dividends

• No access to CGT allowance

Individual vs Limited Company – Which Is Better?

Criteria	Individual	Limited Company
Tax Rate on Gains	18%–24% (CGT)	19%–25% (Corporation Tax)
CGT Allowance	£3,000 (2025/26)	❌ None
Admin Burden	Lower	Higher
Income Flexibility	Full control	Withdrawals trigger tax
Suitable For	Casual investors, low-volume trades	Active crypto businesses or high earners

Rule of Thumb:

• Casual investors: Individual ownership is simpler and more tax-efficient.

• High-volume traders, miners, or crypto businesses: A limited company may offer better control over tax exposure, especially if profits are reinvested.

  
  

How MW Tax Can Help You Navigate Crypto Tax

At MW Tax, we specialise in demystifying the complex tax landscape surrounding crypto assets in the UK. Whether you're a casual Hodler or running a crypto-focused business, we offer:

• ✅ Expert crypto tax reporting for individuals and companies

• ✅ Real-time tax optimisation strategies (e.g., tax-loss harvesting, profit timing)

• ✅ Advice on staking, mining, NFTs, and DeFi taxation

• ✅ Full support with HMRC compliance and investigations

• ✅ Smart structuring—should you go limited? We’ll run the numbers

  
  

📞 Let’s Talk Crypto

Don’t let tax confusion eat into your gains. Contact MW Tax today for a free initial consultation and make sure your crypto is working for you, not against you.

📧 Email: enquiries@mw-tax.com📞 Phone: 01790 378487🌐 Website: www.mw-tax.com