Tax & Regulation
How do I calculate CGT on mined coins?
Record receipt value when mined, pay income tax, then CGT on gain above cost basis when sold. Bear market mining means near-zero cost basis.
When you sell, swap, or spend mined cryptocurrency, Capital Gains Tax may apply on any gain above the market value at the time you received it.
| Step | Action | Example (RVN) |
|---|---|---|
| 1. Record receipt value | Log £ value when coins are mined | Mine 200 RVN at £0.004 each = £0.80 |
| 2. Income tax on receipt | Pay income tax on £0.80 | 20% = £0.16 (or £0 if < £1,000 allowance) |
| 3. Hold until sale | Cost basis = £0.80 | Wait for cycle peak |
| 4. Sell at higher price | Sell 200 RVN at £0.22 each = £44 | Sale proceeds = £44 |
| 5. Calculate gain | £44 − £0.80 = £43.20 gain | This is your capital gain |
| 6. Apply CGT allowance | £3,000 annual allowance | If total gains < £3,000, no CGT due |
| 7. Pay CGT on excess | 18% (basic) or 24% (higher) | Only on gains above £3,000 |
🎯 Bear market advantage: When you mine during a bear market, your coins have very low receipt value (cost basis). This means income tax at receipt is negligible. Your future CGT will be higher (larger gain from low cost basis), but you benefit from the £3,000 annual CGT allowance and potentially lower CGT rates (18–24%) vs income tax rates (20–45%).
ℹ️ HMRC pooling rules: If you mine the same coin across multiple days, HMRC uses a "pooled" average cost basis. This simplifies calculations but means you should keep a daily log of coins received and their £ value. Tools like Koinly or CoinTracker can automate this.