Reporting capital disposals to HM Revenue & Customs requires completing supplementary schedule SA108 alongside your main SA100 return. Capital Gains Tax (CGT) in the United Kingdom is governed by the Taxation of Chargeable Gains Act 1992 (TCGA 1992).
Recent legislative changes have drastically reduced statutory tax-free allowances and accelerated payment deadlines, bringing hundreds of thousands of investors and crypto users into the SA108 net for the first time.
The £3,000 Annual Exempt Amount (AEA)
For decades, the Annual Exempt Amount gave individuals a generous buffer before capital gains triggered tax or reporting obligations.
Statutory cuts have radically reshaped this threshold:
- 2022/23 tax year: £12,300
- 2023/24 tax year: £6,000
- 2024/25 & 2025/26 tax years: £3,000 (frozen)
Because of the £3,000 threshold, modest disposals of listed equities, ETF portfolios, secondary property shares, or cryptocurrency now create mandatory filing obligations.
The 4x Disposal Proceeds Rule
Under TMA 1970 s8A, you must complete Form SA108 even if your net gains are below £3,000 if your gross disposal proceeds exceed £50,000 (for 2023/24 onwards; previously four times the AEA).
Cryptocurrency & Digital Assets: Section 104 Pooling
HMRC does not classify cryptocurrency as currency or legal tender; it is classified as a chargeable asset under TCGA 1992 (codified in the HMRC Cryptoassets Manual).
Disposals include:
- Selling cryptoassets for fiat currency (GBP, EUR, USD).
- Exchanging one token for another (e.g., swapping BTC for ETH).
- Using cryptoassets to purchase goods or services.
- Gifting tokens to anyone other than a spouse or civil partner.
The Statutory Matching Rules
To calculate allowable base costs when you hold identical assets bought at different times, sections 105 to 107 of TCGA 1992 mandate three strict sequential rules:
- Same-Day Rule: Tokens acquired on the same day as the disposal are matched first.
- 30-Day "Bed and Breakfasting" Rule: Tokens acquired within 30 days following the disposal are matched second (preventing artificial tax-loss harvesting).
- The Section 104 Pool: All remaining tokens of that type fall into an unsegregated collective pool. The allowable cost per token is the total pooled expenditure divided by the total number of pooled tokens.
Attempting to compute crypto capital gains using simple FIFO (First-In, First-Out) or LIFO accounting violates UK tax statute and is routinely challenged by HMRC during compliance checks.
Residential Property: The 60-Day Digital Reporting Obligation
Disposing of residential property (Buy-to-Let, holiday homes, or properties not fully shielded by Private Residence Relief) requires navigating a two-tier reporting system under Schedule 2 to the Finance Act 2019:
- Tier 1 (Within 60 days of completion): You must submit a standalone digital return via the HMRC Capital Gains Tax on UK Property service and make an immediate payment on account of the estimated CGT.
- Tier 2 (Annual SA108 Reconciliation): The property disposal must be formally reported on Schedule SA108 of your Self Assessment return, reconciling the advance payment against your total personal tax position.
CGT Rates & Loss Management
Capital gains are added to your taxable income to determine the applicable statutory rate:
- Basic Rate taxpayers: 10% on general assets (18% on residential property).
- Higher & Additional Rate taxpayers: 20% on general assets (24% on residential property, reduced from 28% from 6 April 2024).
Preserving Allowable Losses
If an asset was sold at a loss, you must affirmatively report the loss on Form SA108 within 4 years of the end of the tax year in which the disposal occurred (s43 TMA 1970). Once registered, the allowable loss can be carried forward indefinitely against future capital gains.
How ac-co Automates SA108 Reporting
ac-co eliminates the mathematical headaches of capital gains compliance:
- Directly connects with cryptocurrency exchanges, wallets, and stock brokers to reconstruct Section 104 pools automatically.
- Detects same-day and 30-day matching sequences without manual spreadsheet intervention.
- Integrates 60-day residential property payments on account into your annual SA108 return.
- Prepares audit-ready PDF computations and files directly with HMRC.