UK Crypto Tax Authority Sees Surge in Millionaire Gains and Warning Letters

The UK's tax authority, HM Revenue and Customs (HMRC), has released its annual report on crypto capital gains. According to the data, 240 individuals reported more than £1 million ($1.36 million) in crypto capital gains during the 2024-25 tax year.

In total, 17,600 people filed taxable crypto asset capital gains, with £13.8 billion ($18.76 billion) in disposal proceeds and £1.38 billion ($1.87 billion) in total gains. The average gain per individual was £78,000 ($106,000), with the millionaire cohort accounting for £717 million ($974 million) of the total.

HMRC's data comes as UK crypto investors face increased scrutiny from the tax authority. In 2024-25, HMRC sent 81,000 warning letters to suspected underpaid taxpayers, up 25% from 65,000 in the previous year. The letters allow recipients an opportunity to disclose underpaid taxes before an investigation.

UHY Hacker Young expects the number of investigations into crypto traders to increase as HMRC begins receiving more information from overseas crypto businesses under new international reporting rules. 'Once HMRC has this data then tax investigations into cryptocurrency investors will be like shooting fish in a barrel,' Neela Chauhan, partner at UHY Hacker Young, said.