📝 Description
Learn how transaction fees are treated under HMRC rules and how allowable costs reduce your overall Capital Gains Tax liability in the UK.
⚠️ Warnings
Not all fees are tax-deductible; specifically, gas fees incurred for transferring crypto between your own wallets are generally not allowable costs.
You must keep accurate records of transaction fees across all exchanges, wallets, and platforms to support your allowable cost claims.
⚖ Allowable Transaction Fees
Transaction fees can usually be included in your tax calculation as allowable costs, which reduce your taxable gains and overall tax liability.
Fees when buying crypto
Fees paid when acquiring cryptocurrency are added to your asset's total purchase cost (cost basis).
Item | Amount |
ETH purchase | £2,000 |
Exchange fee | £50 |
Cost basis | £2,050 |
This increased cost basis is used to calculate future gains when the asset is disposed of.
Fees when selling crypto
Fees paid when selling cryptocurrency are deducted from the total sale proceeds.
Item | Amount |
Sale price | £3,000 |
Exchange fee | £30 |
Net proceeds | £2,970 |
Your taxable gain calculation becomes: Net proceeds (£2,970) − Cost basis.
Gas fees treatment
Blockchain network transaction fees (gas fees) are treated according to the underlying activity:
Situation | Treatment |
Gas fee for buying crypto | Added to cost basis |
Gas fee for selling crypto | Deducted from proceeds |
Gas fee for wallet transfer | Not deductible |
💡 Recommendations
Ensure you accurately track all exchange and network fees, as correctly including them can significantly reduce your taxable gain.
Example Impact of Fees:
Scenario | Gain |
Without fees | £1,000 |
With fees included | £850 |