Crypto margin and leveraged trading — UK tax basics
Quick answer: Most individuals pay CGT on net gains from crypto disposals. Very frequent leveraged trading might be classified as trading income — Income Tax and NI instead of CGT. Factors include volume, organisation and intention. Keep detailed records of every open and close.
Leveraged trading increases risk and tax complexity. Frequent trading may be classified as a financial trade rather than investing.
Capital gains default
HMRC’s default for individuals is capital treatment — each closing trade is a disposal. Pooling rules apply to the underlying asset.
When trading income applies
Badges of trade — frequency, sophistication, short holding periods — may indicate a trading business. Professional advice essential for active day traders.
Records for leveraged platforms
Export full history including liquidations, funding payments and fees. Software often mislabels derivatives.
Frequently asked questions
Are CFDs on crypto the same as spot?+
CFDs may have different tax treatment — potentially Income Tax. Check product type.