New rules which came into force at the start of the year have made it harder for crypto investors to hide their gains from international tax authorities.

The Cryptoasset Reporting Framework (CARF) requires UK reporting cryptoasset service providers to collect and report information to HMRC about the tax residency of users and their transactions.

Information on non-UK users will be exchanged with other tax jurisdictions who have also implemented the CARF. In return, HMRC will receive data collected from other jurisdictions to help it tackle tax evasion and avoidance.

Accountants BDO warned that HMRC sees the profit or loss made on buying and selling of exchange tokens as within capital gains tax.

The firm said a disposal of a crypto asset occurs when you sell it for fiat currency, trade it for another crypto asset, spend it or gift it to someone other than a spouse or civil partner. HMRC’s guidance says that only in exceptional circumstances will it accept that buying and selling of crypto amounts to a trade for tax purposes.

BDO said that anyone selling crypto for a profit during the 2024-25 tax year, may have reporting and tax obligations and be required to file a tax return before 31 January.

For the first time this year, the self-assessment tax return form has a dedicated section where taxpayers can declare their crypto gains and losses.

During the 2024-25 tax year, the price of some of the more popular crypto tokens recorded significant changes with Bitcoin climbing by more than 23% between 6 April 2024 and 5 April 2025. Meanwhile Ethereum dropped 46% in the same period.

Dawn Register, a tax dispute resolution partner at BDO said: “HMRC has been concerned for some time about high levels of non-compliance among crypto investors.

“The new rules have given HMRC access to a much richer dataset on cryptoasset investors and their transactions. Information will be shared automatically across international borders, allowing HMRC to better target those UK tax residents it suspects of failing to correctly declare their gains.”

She said another area where cryptoassets pose challenges for taxpayers is inheritance tax. Ms Register said: “HMRC requires that all cryptoassets are included in an IHT return, the form IHT400, as they are considered part of the deceased's estate for tax purposes.

“Cryptoassets must be valued at their fair market value in pound sterling on the date of death.”