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April 25th 2021

Cryptoassets: record keeping for tax purposes

Cryptoasset exchanges may only keep records of transactions for a short period of time; exchanges also come and go; so UK taxpayers must take care to keep appropriate records of crypto trading activity, and not place too much reliance on the exchange platforms.

Records may be kept in different formats:

  • paper (cold) wallets containing the public and private keys;
  • electronic (hot) wallets on devices;
  • other records of transactions, for example reports downloaded from a cryptoasset exchange;
  • hardware (cold) wallets like a usb stick, containing public and private keys.

Cryptoassets are digital assets so all records in a wallet should show transactions AND balances, either in full form or else referable to a public blockchain.

An individual's access to fiat money could come from:

  • the point of deposits into a bank account; and
  • the use of a cryptoasset ATM.

These records should also be retained so that they can be produced, if required, in the event of an HMRC enquiry.

A full record of cryptoasset transactions would often include all of the following:

  • the type of cryptoasset;
  • the date of the transaction;
  • whether they were bought or sold;
  • the number of units involved;
  • the value of the transaction in GB Pounds at the date of the transaction;
  • the cumulative total of the tokens held; and
  • bank statements and wallet addresses.

Need help with your tax return? Contact us today for assistance.


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