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Author: Admin | 2025-04-28
£1,400 GainEmma recognizes a £1,400 capital gain from selling her 1 ETH in December.How does claiming capital losses work? In the United Kingdom, capital losses can be used to offset your capital gains for the year. If you have a net loss for the year, it can be carried forward into future tax years.As a result, claiming capital losses can significantly reduce your tax liability, and even bring your total taxable gains below the tax-free allowance amount of £6,000.However, it’s important to remember that there are some restrictions on claiming capital losses. The Same Day Rule and the Bed & Breakfast Rule are designed to prevent investors from claiming losses solely for tax purposes. What is the Same Day Rule and the Bed & Breakfast Rule?There are two additional rules that apply to crypto disposals in the UK: the Same Day Rule and the Bed & Breakfast Rule.Each of these rules are designed to prevent wash sales, which is a scenario in which an investor intentionally sells or disposes of an asset that has decreased in value and then buys it back soon after. The Same Day Rule and the Bed & Breakfasting Rule exist to eliminate the potential tax benefits of wash sales.The Same Day Rule explainedIf you buy and sell a cryptocurrency the same day, then the sale is considered made from the coins you bought on that same day.That means the cost basis for your sale will be the acquisition cost of the crypto you bought on the same day. This will be the case even if the acquisition of the crypto takes place after the sale — as long as they are both on the same day.The Bed & Breakfast Rule explainedAlso known as the 30-day Rule, the Bed & Breakfast Rule states that any of
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