Glossary
- Blockchain
- A shared digital record of transactions copied across many computers.
- Wallet
- An app or device that stores the keys to your crypto.
- Exchange
- A platform where you buy and sell crypto for pounds or other tokens.
- Seed phrase
- Recovery words that restore wallet access — never share them.
- NFT
- A unique digital token representing ownership of a specific item.
- Stablecoin
- A token designed to hold a steady value against fiat currency.
- CARF
- Cryptoasset Reporting Framework — exchange reporting to HMRC.
- FCA register
- Official list of authorised and registered financial firms.
- Disposal
- Selling, swapping, spending or gifting crypto — may trigger CGT.
- Pooling
- HMRC method of averaging acquisition cost per token type.
- DeFi
- Decentralised finance — lending, swapping and earning via software instead of banks.
- SA108
- HMRC capital gains supplementary form — includes dedicated cryptoasset boxes from 2024/25.
- KYC
- Know Your Customer — identity checks required before trading on UK crypto platforms.
- MLR registration
- FCA registration under Money Laundering Regulations — not full investment authorisation until 2027.
- FSCS
- Financial Services Compensation Scheme — protects bank deposits, not crypto on exchanges.
- Hardware wallet
- Physical device storing crypto keys offline.
- Capital Gains Tax
- Tax on profit when you dispose of assets including crypto.
- UTR
- Unique Taxpayer Reference — 10-digit number for Self Assessment.
- DEX
- Decentralised exchange — token swaps via smart contracts, not a central company.
- Nudge letter
- HMRC letter suggesting undeclared tax based on third-party data.
- Voluntary disclosure
- Reporting previously undeclared tax to HMRC before an investigation.
- Section 104 pool
- HMRC average cost pool for each token type when calculating CGT.
- 30-day rule
- HMRC matching rule — rebuys within 30 days of selling match the sale first.
- Consumer Duty
- FCA requirement to deliver good outcomes for retail customers — applies to crypto from 2027.
- Pig butchering
- Long-con romance scam leading to fake crypto investment platforms.