# Crypto margin and leveraged trading — UK tax basics

Most individuals pay CGT on net gains from crypto disposals. Very frequent leveraged trading might be classified as trading income — Income Tax and NI instead of CGT. Factors include volume, organisation and intention. Keep detailed records of every open and close.

## Key facts
- Leverage magnifies gains and losses.
- Trading vs investment is fact-specific.
- Funding fees may affect calculations.
- Losses rules differ for trading vs capital.

## Capital gains default

HMRC’s default for individuals is capital treatment — each closing trade is a disposal. Pooling rules apply to the underlying asset.
## When trading income applies

Badges of trade — frequency, sophistication, short holding periods — may indicate a trading business. Professional advice essential for active day traders.
## Records for leveraged platforms

Export full history including liquidations, funding payments and fees. Software often mislabels derivatives.

## FAQs
### Are CFDs on crypto the same as spot?

CFDs may have different tax treatment — potentially Income Tax. Check product type.

## Sources

- [HMRC — Cryptoassets Manual](https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual)

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— Digital Assets UK (https://digital-assets.co.uk/tax/margin-trading-crypto-tax/), reviewed 2026-06-23. Source: https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual