Donating crypto can have tax consequences that are not always obvious. Whether you are giving crypto to an individual, a business, or a charity, the tax treatment depends on who receives it and the nature of the transaction.
This guide explains how HMRC treats crypto donations for Capital Gains Tax purposes, and what both donors and recipients need to consider before making or accepting a transfer.
Contents
- 1. Donating Crypto to Non-Charity Recipients
- 2. Donating Crypto to a Charity
- 3. Example: Taxable Gain on Crypto Donation
- 4. Example: No Gain/No Loss Disposal
- 5. Receiving Crypto Donations
- Conclusion
1. Donating Crypto to Non-Charity Recipients
Donating crypto to a non-charity recipient, such as an individual, political party, or business, is treated as a disposal for Capital Gains Tax (CGT) purposes.
HMRC requires that the disposal is reported at market value on the date of the gift. This means:
- If your crypto has increased in value since you acquired it, you may need to pay CGT on the gain.
- The recipient acquires the crypto at its market value at the date of the gift, which becomes their acquisition cost.
This treatment applies regardless of the type of recipient. There is no specific exemption for donations to political parties or businesses.
See our example of a gain on a crypto donation at market value.
If you donate crypto to your spouse or civil partner, no gain or loss arises at the time of transfer; the recipient simply takes on your base cost, which is known as a No Gain/No Loss Disposal. For more information on gifts involving individuals, see our crypto gifts and tax article.
2. Donating Crypto to a Charity
Donating crypto to a registered UK charity may not trigger CGT, provided there is no arrangement associated with the donation (known as a "tainted donation"). In these cases, the transfer is treated as a No Gain/No Loss disposal.
However, Gift Aid is not available on crypto donations. This is because Gift Aid applies only to qualifying monetary gifts. As crypto is treated as property (not money), it does not qualify for tax relief under the Gift Aid scheme.
Where crypto is sold to a charity for less than its market value, the tax treatment can differ. In these cases, the consideration received is compared with the donor’s base cost, and a taxable gain will arise if the consideration exceeds that base cost.
Where the consideration is less than both the market value and the donor’s base cost, any loss is effectively disallowed, as the No Gain/No Loss rules apply and prevent the recognition of a capital loss.
3. Example: Taxable Gain on Crypto Donation at Market Value
Even though no money is received by the donor, a taxable gain can still arise when they donate crypto, as we've demonstrated in this example:
John has held 1 ETH for several years, which he originally purchased for £500. In 2025, he decides to donate the ETH, now worth £2,000, to a political party.
Because the recipient is not a registered charity, the donation is treated as taking place at market value. John therefore has a capital gain of £1,500 and may have a tax liability depending on his wider CGT position.
The above example is a straightforward scenario to illustrate the point. However, if you are donating crypto which you have acquired over a number of acquisitions or you are only donating a portion of your holding, then you will need to consider HMRC’s share pooling and matching rules to calculate your gain.
4. Example: No Gain/No Loss Donation
No Gain / No Loss disposals are a familiar concept within capital gains tax, most commonly seen in asset transfers between spouses. But for those without a tax background, it’s not always a well understood phrase.
In the example below, we’ve shown how a No Gain / No Loss disposal applies to a charitable crypto donation, but the same principle also applies when gifting crypto between spouses.
Jess holds 1,000 ABC tokens which were acquired over time, and they have a pooled cost price of £2,000. She decides to donate 250 tokens, worth £1,000 at the time, to a registered UK charity.
Because the donation is unconditional, it qualifies as a No Gain/No Loss disposal. This means Jess will remove 250 tokens and £500 of base cost from her S104 pool.
For CGT purposes, the disposal is treated as occurring at the amount of base cost removed from the pool i.e. £500 rather than the market value of £1,000; therefore, there is neither a gain nor a loss for Jess.
5. Receiving Crypto Donations
As an Individual
If you receive crypto as a pure donation (i.e. not in exchange for some service), there is no immediate tax liability. The crypto is treated as acquired at its market value at the time of receipt. When you later dispose of the crypto, you may owe CGT based on the change in value from that point.
Chris receives 0.2 BTC as a personal donation from a friend in April 2025. At the time of the gift, the Bitcoin is worth £12,000.
Because the donation is genuinely personal and not in exchange for goods or services, Chris does not have to pay tax when he receives it. For Capital Gains Tax purposes, he is treated as acquiring the Bitcoin at £12,000.
If Chris later sells the BTC for £14,000, he will report a capital gain of £2,000, based on the increase in value since he received it.
As a Business
If a business receives a crypto donation, HMRC may treat this as taxable income if it relates to commercial activity. This includes sponsorships or any donations connected to the supply of goods or services.
In such cases, the crypto must be recorded at market value when received, and included as trading income. Any future gain or loss when the crypto is later sold will also be subject to tax under CGT or corporation tax, depending on the entity type of the business.
Conclusion
Donating or receiving crypto can have tax consequences depending on the recipient and purpose. Most donations are treated as disposals, and gains or losses may need to be reported. Donations to registered UK charities are usually exempt from CGT, but Gift Aid is not available to the charity or the donor.
Most crypto donations are treated as disposals at market value, meaning a tax liability can arise even where no money is received. The main exception is donations to registered UK charities, which are usually treated as No Gain/No Loss disposals.
For recipients, the tax position depends on the nature of the transfer. Personal gifts are not taxed on receipt, but the market value at that point becomes the base cost for future disposals.
In practice, we often see crypto donations reported incorrectly, particularly where no cash is received or where assets are transferred at a discount.
Understanding when a disposal arises, and how it is valued, is key to avoiding unexpected tax liabilities.
