How to Track Your Crypto Gains & Losses Easily

Cryptocurrency trading offers exciting opportunities, but it also brings a complex web of tax obligations that many investors overlook. Unlike traditional investments, crypto transactions occur across multiple platforms, exchanges, wallets, DeFi protocols, making it challenging to maintain an accurate picture of your financial position. Yet HMRC doesn’t accept ignorance as an excuse. The tax authority has invested heavily in tracking crypto activity, establishing data-sharing agreements with major exchanges and collecting transaction data stretching back to 2014. From 2026, UK exchanges will be required to collect and share customer data directly with HMRC, including wallet addresses and granular transaction details.

For anyone holding or trading cryptocurrency in the UK, proper tracking isn’t just good practice, it’s a legal requirement. Whether you’re an active day trader juggling dozens of transactions weekly or a casual investor who’s made a handful of purchases, understanding how to track your crypto gains and losses accurately can save you from penalties whilst ensuring you never overpay on your tax bill. The good news? Modern tools and methods have made this process considerably easier than it was even a few years ago. Let’s explore how to build a tracking system that keeps you compliant without consuming all your time.

Why Tracking Crypto Gains and Losses Is Essential

The importance of meticulous crypto tracking extends well beyond simple curiosity about your portfolio’s performance. HMRC treats cryptocurrency as property for tax purposes, which means every disposal, whether you’re selling for fiat currency, trading one coin for another, or even using crypto to purchase goods, potentially triggers a taxable event. Capital Gains Tax applies when you dispose of crypto assets, whilst income tax hits earnings from mining, staking, or receiving crypto as payment.

HMRC’s reach into the crypto world has grown considerably more sophisticated. The tax authority possesses cryptocurrency transaction data dating back to 2014 and has established formal data-sharing agreements with major exchanges operating in the UK. This isn’t theoretical surveillance, HMRC actively uses this information to identify discrepancies in tax returns. From 2026, regulatory requirements will tighten further, with exchanges mandated to collect and share comprehensive customer data, including wallet addresses and detailed transaction histories.

The burden of proof sits squarely with the taxpayer. If HMRC queries your return, you’ll need to demonstrate the accuracy of your figures with proper documentation. Failure to report correctly can result in penalties ranging from minor fines to significant charges for deliberate concealment. Even innocent mistakes, like forgetting to include transactions from a secondary exchange, can trigger investigations.

Beyond compliance, accurate tracking serves your financial interests. Proper records help identify tax-loss harvesting opportunities, where realising losses can offset gains and reduce your tax liability. They also provide clarity on your actual investment performance once fees and costs are properly accounted for. Many crypto investors discover they haven’t made as much profit as they assumed once transaction costs are factored in correctly.

Choose the Right Tracking Method for Your Needs

Not all crypto investors require the same tracking solution. Someone who bought Bitcoin once in 2020 and held it faces a vastly different challenge than an active trader executing hundreds of swaps across DeFi protocols. Your tracking approach should match your activity level, technical comfort, and budget.

The fundamental question is whether to handle tracking manually or automate the process. Manual methods offer complete control and zero software costs but demand considerable time and attention to detail. Automated solutions save time and reduce errors but typically require subscription fees. For most people, the decision hinges on transaction volume, if you’re making more than a dozen transactions monthly, automation quickly pays for itself through time saved and improved accuracy.

It’s worth noting that the responsibility for accurate reporting remains with you regardless of which tools you use. When transferring crypto between wallets and exchanges, those movements must be tracked to avoid double-counting or missing transactions entirely. HMRC doesn’t distinguish between platforms, all your crypto activity must be consolidated into a single, coherent record.

Manual Tracking with Spreadsheets

Spreadsheets represent the most basic tracking method, requiring nothing more than Excel, Google Sheets, or similar software. This approach works best for investors with minimal trading activity, perhaps a few purchases annually from a single exchange.

To track manually, you’ll need to record several data points for every transaction: the date and time, the cryptocurrency involved, the quantity transacted, the fair market value in GBP at the transaction moment, any associated fees, and whether the transaction represents an acquisition or disposal. For disposals, you’ll also need to calculate the gain or loss based on your cost basis.

The primary advantage is control. You understand exactly where every figure comes from because you’ve entered it yourself. There’s no subscription fee, and your data remains entirely within your control. But, the disadvantages become apparent quickly. Looking up historical GBP values for each transaction is tedious. Calculating gains using HMRC’s share pooling rules (where you average the cost of all your holdings of a particular coin) becomes complex with multiple purchases. And the risk of human error, a mistyped decimal point or incorrect formula, grows with every entry.

Spreadsheets become impractical once you’re dealing with more than 50 transactions annually or trading across multiple platforms. The time investment simply isn’t worthwhile, and the error risk becomes concerning.

Using Crypto Portfolio Tracking Apps

Portfolio tracking apps like Blockfolio, Delta, or CoinStats offer a middle ground. These applications connect to exchanges and wallets to display your holdings in real-time, calculating your portfolio’s current value and tracking performance over time.

These apps excel at showing you what you own and what it’s worth at any given moment. Most support dozens of exchanges and hundreds of coins, updating prices automatically. The interface is typically mobile-friendly, letting you check your portfolio from anywhere.

But, portfolio trackers aren’t designed primarily for tax compliance. Whilst they’ll show your overall profit or loss, they generally don’t apply HMRC’s specific calculation rules like share pooling or the 30-day bed and breakfasting rule. They’re excellent for monitoring performance but insufficient as your sole tracking solution if you need to file a tax return.

For casual investors who want portfolio visibility without deep tax functionality, these apps work well alongside manual tax calculations. But they shouldn’t be confused with dedicated tax software.

Dedicated Crypto Tax Software

Crypto tax software like Koinly, CoinTracking, and CoinLedger represents the most comprehensive solution for investors with moderate to high transaction volumes. These platforms specifically address UK tax compliance, automatically applying HMRC’s calculation rules and generating reports ready for Self Assessment submission.

The software works by connecting to your exchanges and wallets, either through API connections (which provide read-only access to your transaction history) or CSV file imports. Once connected, the platform imports all historical transactions, identifies transaction types (trade, transfer, income, etc.), looks up historical GBP values, and calculates gains and losses according to UK tax rules.

The advantages are substantial. Automated imports eliminate manual data entry errors. The software handles complex scenarios like share pooling across multiple purchases, same-day rules, and the 30-day bed and breakfasting rule automatically. Most platforms generate completed Capital Gains Summaries showing exactly what figures to enter on your Self Assessment forms. They also identify income from sources like staking rewards and airdrops, which many investors forget to report.

Pricing typically operates on a tiered basis, with costs increasing based on your transaction count. Basic plans might cost £50–£100 annually for a few hundred transactions, whilst high-volume traders might pay several hundred pounds. But, even the higher tiers often prove cost-effective compared to hiring an accountant or the risk of filing incorrectly.

The main limitation is that these platforms require accurate initial setup. If you fail to import data from an exchange or wallet, your calculations will be incomplete. And whilst the software applies UK rules, you’re eventually responsible for reviewing the results and ensuring they’re correct.

Connect Your Wallets and Exchanges

Once you’ve selected your tracking method, particularly if you’re using dedicated tax software, the next step involves connecting all your crypto accounts. This consolidation is essential because HMRC expects a complete picture of your crypto activity, not fragmented reports from individual platforms.

Most tax software integrates directly with major UK exchanges like Coinbase, Binance, Kraken, and Bitstamp through secure API connections. An API (Application Programming Interface) provides read-only access to your transaction history without granting the software ability to trade or withdraw funds. You generate the API key within your exchange’s security settings, then paste it into the tax software.

API connections offer significant advantages. They automatically import all historical transactions, often going back years. Once configured, many update continuously or with a single click, ensuring your records remain current. The automated process eliminates transcription errors that plague manual entry.

For exchanges or wallets that don’t support API connections, CSV file imports provide an alternative. You download transaction history files from the platform, then upload them to your tracking software. Whilst more manual than API integration, this method still beats typing every transaction individually.

Wallet integration requires your public wallet address. Never share your private keys or seed phrase with any software, legitimate tracking tools only need your public address to view transactions on the blockchain. For hardware wallets like Ledger or Trezor, you’ll typically enter the public address associated with each account you use.

The critical task here is completeness. Missing even a single exchange or wallet can throw off your entire calculation. Create a comprehensive list of every platform you’ve used to buy, sell, or store crypto, then systematically connect each one. Don’t forget:

• Exchanges where you’ve made purchases, even if you immediately transferred coins elsewhere
• DeFi platforms where you’ve provided liquidity or swapped tokens
• Wallets where you’ve held crypto, even if you didn’t actively trade from them
• Older accounts you might have abandoned but once contained crypto

Transfers between your own wallets and exchanges deserve particular attention. These aren’t taxable events, but they must be accurately recorded to prevent double-counting or creating false gains. Quality tax software identifies matching deposits and withdrawals automatically, but you should verify these are correctly paired.

Record Every Transaction Accurately

HMRC’s record-keeping requirements for cryptocurrency are specific and unforgiving. The tax authority mandates retention of all cryptocurrency transaction records for at least one year after the Self Assessment deadline, effectively, you need records for at least two years after the tax year ends. For the 2023–24 tax year, that means keeping records until at least January 2027.

What exactly constitutes a complete transaction record? For every crypto transaction, you must document:

For acquisitions: The date and time of acquisition, the type and quantity of cryptocurrency acquired, the cost in GBP (including any fees), the acquisition method (purchase, mining, gift, etc.), and which exchange or wallet was involved.

For disposals: The date and time of disposal, the type and quantity of cryptocurrency disposed of, the proceeds in GBP (including any fees), the disposal method (sale, trade, spending, gift), the recipient or destination, and which exchange or wallet was involved.

The distinction between disposals and non-taxable events is crucial. Disposals that trigger capital gains calculations include selling crypto for pounds sterling, trading one cryptocurrency for another, using crypto to purchase goods or services, and gifting crypto to anyone except your spouse or civil partner. Events that aren’t disposals include transferring crypto between your own wallets or exchange accounts, buying crypto with fiat currency (this is an acquisition), and donating to registered charities.

Fair market value in GBP at the transaction moment determines your proceeds for disposals and cost for acquisitions not involving direct GBP payment. For exchange-based transactions, the platform’s GBP price at trade execution typically serves as fair market value. For transactions outside exchanges, you’ll need to reference reliable price data from that specific moment.

Transaction fees must be factored into your records, they reduce your gains or increase your costs. This includes exchange trading fees, blockchain network fees (gas fees on Ethereum, for example), and withdrawal fees charged by platforms. These fees adjust your cost basis and disposal proceeds, eventually affecting your taxable gain or loss.

The challenge multiplies with DeFi activity. Swapping tokens through Uniswap, providing liquidity to pools, or harvesting yield farming rewards all create taxable events that must be recorded. Many DeFi users underestimate the record-keeping burden, a single day of active DeFi trading can generate dozens of taxable transactions.

Proper transaction categorisation matters too. Not all crypto receipts are capital gains. Mining rewards, staking income, airdrops, and crypto received as payment for services constitute income taxed at your income tax rate, not capital gains rate. These must be recorded separately and reported differently on your tax return.

Calculate Your Cost Basis Correctly

Cost basis calculation represents the most technically complex aspect of crypto tax tracking, and it’s where many taxpayers make costly errors. Your cost basis, what you originally paid for the crypto you’re disposing of, determines your taxable gain or loss. Get this wrong, and you’ll either overpay tax or potentially face penalties for underpayment.

In its simplest form, cost basis equals your purchase price plus any transaction fees. If you bought 1 Bitcoin for £20,000 and paid £100 in fees, your cost basis is £20,100. When you later sell that Bitcoin for £25,000 (minus £100 in fees), your gain is £4,800 (£24,900 proceeds minus £20,100 cost basis).

Complexity emerges when you’ve made multiple purchases at different prices. Unlike some countries that allow you to choose which specific units you’re selling (specific identification), HMRC mandates a particular calculation sequence through its matching rules.

The same-day rule requires matching disposals first with acquisitions made on the same day. If you buy and sell identical cryptocurrency on the same day, those transactions match regardless of the order they occurred.

The 30-day bed and breakfasting rule applies next. If you repurchase the same cryptocurrency within 30 days after a disposal, those acquisitions match with the disposal in chronological order. This rule prevents people from creating artificial losses by selling and immediately repurchasing (the traditional ‘bed and breakfasting’ tax avoidance strategy).

After applying same-day and 30-day rules, any remaining disposals are matched against your Section 104 Pool. This pooling method requires combining all your remaining holdings of a particular cryptocurrency into a single pool, with an average cost basis. Each new acquisition increases the pool’s quantity and total cost. Each disposal reduces the pool proportionally.

Here’s a simplified example: Suppose you bought 2 Bitcoin at £15,000 each (total cost £30,000), then later bought 1 Bitcoin at £20,000. Your Section 104 Pool now contains 3 Bitcoin with a total cost of £50,000, giving an average cost basis of £16,667 per Bitcoin. When you sell 1 Bitcoin for £25,000, your gain is calculated using the average cost basis of £16,667, resulting in a gain of £8,333.

The pool’s average cost continuously adjusts with each purchase. This calculation becomes complex quickly, tracking dozens of purchases across multiple years for various cryptocurrencies is why most active traders rely on tax software rather than spreadsheets.

Remember that moving crypto between your own wallets doesn’t create a disposal, but it also doesn’t reset your cost basis. The original acquisition cost travels with the crypto regardless of how many wallets it passes through.

Monitor Real-Time Portfolio Performance

Whilst annual tax reporting is mandatory, year-round portfolio monitoring delivers benefits that extend beyond compliance. Real-time tracking helps you make informed decisions about when to realise gains or losses, identify opportunities for tax-loss harvesting, and maintain accurate records that prevent year-end scrambles.

Tax-loss harvesting, strategically realising losses to offset gains, is one area where continuous monitoring proves valuable. In the UK, you can offset capital losses against capital gains from the same tax year. If your losses exceed your gains, you can carry those losses forward to future tax years indefinitely. But, you must formally register capital losses with HMRC within four years of the end of the relevant tax year, or you’ll lose the ability to claim them.

Monitoring throughout the year lets you spot when holdings have dropped below your acquisition cost. If you’re facing capital gains from other disposals during the same tax year, realising these losses can reduce your tax liability. Just be aware of HMRC’s 30-day rule, if you repurchase the same cryptocurrency within 30 days, the loss you’re trying to claim will be reduced or eliminated.

Regular portfolio reviews also help catch tracking errors before they compound. Perhaps an exchange transaction didn’t import correctly, or a wallet address wasn’t added to your tracking system. Discovering these gaps in December is far easier than trying to reconstruct months of missing transactions in January when your Self Assessment deadline looms.

For those using automated tracking software, a monthly review keeps you familiar with your records. Log in, verify that recent transactions appear correctly, check that transfers between your own accounts are properly matched (rather than appearing as a disposal from one account and a mysterious acquisition in another), and ensure income from staking or other sources is categorised appropriately.

Real-time monitoring doesn’t mean obsessive checking. For most investors, a monthly review of 15–30 minutes suffices to maintain confidence that their tracking remains accurate. The goal is preventing problems, not creating additional stress.

Prepare for Tax Reporting

When the tax year ends on 5 April, your attention turns from tracking to reporting. UK taxpayers with crypto gains, losses, or income must report through Self Assessment, even if they’re employed and their employer handles income tax through PAYE.

You’ll need to complete form SA100 (the main Self Assessment return) and form SA108 (Capital Gains summary). Alternatively, HMRC’s online Government Gateway service allows digital submission, which most taxpayers find more straightforward than paper forms. The Self Assessment deadline is 31 January following the end of the tax year, so for the 2024–25 tax year ending 5 April 2025, the deadline is 31 January 2026.

A lesser-known option is real-time Capital Gains Tax reporting through HMRC’s online service. For disposals made from 6 April 2020 onwards, you can report and pay Capital Gains Tax within 60 days of the disposal, rather than waiting until Self Assessment. This approach spreads your tax payment throughout the year rather than facing a single large bill in January.

Before completing your return, ensure your tracking software or spreadsheet provides the figures you’ll need:

Total disposals: The combined proceeds from all crypto disposals during the tax year.

Total gains: Your calculated gains after subtracting cost basis from proceeds.

Total losses: Any losses from disposals where proceeds were less than cost basis.

Net gain: Total gains minus total losses (this is the figure subject to Capital Gains Tax after applying your annual exempt amount).

Crypto income: Separate from capital gains, any income from mining, staking, airdrops, or crypto received as payment must be reported as income and taxed at your income tax rate.

The Capital Gains Tax annual exempt amount (£3,000 for 2024–25, reduced from previous years) means you only pay tax on gains exceeding this threshold. If your total gains are below £3,000, you don’t owe Capital Gains Tax, but you may still need to report if your total proceeds exceed £12,000.

If you’re using dedicated crypto tax software, most platforms generate completed Capital Gains summaries that show exactly which figures go in which boxes on form SA108. Some even offer direct integration with HMRC systems or accountant software. These reports are designed to simplify the filing process, you’re essentially transcribing figures rather than calculating them yourself.

Don’t overlook the opportunity to claim losses. If your crypto disposals resulted in a net loss for the tax year, registering those losses with HMRC preserves your ability to offset them against future gains. Failing to register within the four-year deadline means those losses vanish permanently.

Common Mistakes to Avoid When Tracking

Even diligent taxpayers make predictable errors when tracking crypto gains and losses. Awareness of these common pitfalls helps you avoid them.

Ignoring transaction fees in cost basis calculations is remarkably common. Every fee paid, exchange trading fees, blockchain network fees, withdrawal charges, should adjust either your cost basis (for acquisitions) or your proceeds (for disposals). Overlooking fees means overstating your actual gains and potentially overpaying tax. Whilst individual fees might seem trivial, dozens or hundreds of transactions mean fees can total thousands of pounds over a tax year.

Failing to track transfers between wallets creates chaos in your records. When you move Bitcoin from Coinbase to your Ledger hardware wallet, that’s not a disposal, you still own the Bitcoin. But if your tracking system doesn’t recognise the transfer, it might show a disposal from Coinbase (creating a false gain or loss) and a mysterious acquisition in your Ledger (with no cost basis). Proper transfer matching is essential, and this is where automated software excels over spreadsheets.

Mixing up cost basis accounting methods or applying the wrong method entirely causes significant calculation errors. Some taxpayers attempt to use methods permitted in other countries (like FIFO or specific identification) rather than HMRC’s required same-day, 30-day, and Section 104 Pool sequence. This isn’t a matter of preference, UK taxpayers must use HMRC’s prescribed method.

Missing the four-year deadline for registering capital losses is particularly frustrating because it’s entirely avoidable. If you’ve realised losses, you must notify HMRC within four years after the end of the tax year, or those losses can’t be carried forward to offset future gains. A significant loss in 2020 that wasn’t registered by April 2025 becomes worthless for tax purposes.

Neglecting to report all income sources happens frequently with staking rewards, airdrops, and other “free” crypto. Many taxpayers understand that selling crypto creates capital gains but overlook that receiving crypto as income creates immediate income tax liability based on the fair market value at receipt. Later selling that received crypto then creates a separate capital gain or loss. Both events must be reported.

Incomplete records from forgetting an old exchange account or not tracking DeFi activity can derail your entire return. HMRC expects comprehensive reporting, partial records won’t suffice if the tax authority identifies unreported transactions through its data-sharing agreements with exchanges.

Treating all crypto-to-crypto swaps as non-taxable is a dangerous misconception. In the UK, trading one cryptocurrency for another is a disposal of the first cryptocurrency (potentially creating a taxable gain) and an acquisition of the second. Every swap triggers capital gains calculations.

Perhaps the biggest mistake is leaving everything until the last minute. Reconstructing a year’s worth of crypto transactions in January when your Self Assessment is due is stressful and error-prone. Regular record-keeping throughout the year, even just monthly reviews, makes tax time vastly less painful.

Conclusion

Tracking cryptocurrency gains and losses might initially seem daunting, but it’s a manageable task when approached systematically. The right method depends entirely on your circumstances, casual investors with minimal transactions can manage with spreadsheets, whilst active traders will find dedicated tax software quickly pays for itself through time saved and improved accuracy.

Regardless of which tools you choose, the fundamentals remain constant. Maintain comprehensive records of every transaction, including acquisitions, disposals, and transfers. Apply HMRC’s cost basis calculation rules correctly, using the same-day, 30-day, and Section 104 Pool methods in the proper sequence. Document everything with sufficient detail to satisfy HMRC’s requirements, keeping records for at least two years after the relevant tax year.

HMRC’s increasing sophistication in tracking crypto activity means compliance isn’t optional, it’s essential. The tax authority’s data-sharing agreements and upcoming regulatory requirements from 2026 mean undeclared crypto income and gains are increasingly likely to be detected. But proper tracking serves your interests beyond avoiding penalties. Accurate records help optimise your tax position through loss harvesting, prevent overpayment through correct cost basis calculation, and provide clarity about your actual investment performance.

Start with the tracking infrastructure that matches your activity level. Connect all your exchanges and wallets to eliminate blind spots. Review your records regularly rather than waiting until year-end. When tax time arrives, you’ll have everything organised and ready, turning a potentially stressful obligation into a straightforward administrative task. The effort invested in proper tracking throughout the year pays dividends in reduced stress, improved accuracy, and confidence that you’re meeting your obligations whilst never paying more tax than necessary.

Frequently Asked Questions

How do I track crypto gains and losses for UK tax purposes?

You can track crypto gains and losses using manual spreadsheets, portfolio tracking apps, or dedicated crypto tax software like Koinly or CoinTracking. Tax software automatically applies HMRC’s calculation rules, imports transactions from exchanges, and generates reports for Self Assessment, making it ideal for active traders.

What is the Section 104 Pool method for calculating crypto cost basis?

The Section 104 Pool method combines all holdings of the same cryptocurrency into a single pool with an average cost basis. Each purchase increases the pool’s value and quantity, whilst disposals reduce it proportionally. HMRC requires this method after applying same-day and 30-day rules.

Do I need to report crypto if I only bought and held without selling?

No, simply buying and holding cryptocurrency doesn’t create a taxable event. You only need to report crypto gains and losses when you dispose of assets through selling, trading, spending, or gifting. However, keep records of your acquisitions for future tax calculations.

Can HMRC see my cryptocurrency transactions?

Yes, HMRC has cryptocurrency transaction data dating back to 2014 and maintains data-sharing agreements with major UK exchanges. From 2026, exchanges must collect and share comprehensive customer data including wallet addresses and detailed transaction histories, significantly increasing HMRC’s oversight capabilities.

What is crypto tax-loss harvesting and how does it work?

Tax-loss harvesting involves strategically selling cryptocurrency at a loss to offset capital gains from profitable disposals within the same tax year. Unused losses can be carried forward indefinitely to reduce future tax bills, but you must register them with HMRC within four years.

Are staking rewards and airdrops taxable in the UK?

Yes, staking rewards and airdrops are taxed as income at your income tax rate based on their fair market value when received. Later selling these assets creates a separate capital gains tax event based on the difference between receipt value and disposal proceeds.