How is Bitcoin held by a limited company taxed?

In short: Bitcoin held by a limited company as an investment normally follows chargeable gains rules. An accounts impairment is added back; tax relief depends on a disposal loss. Part 8 needs continuing use, not just holding. Taxley prepares investment company returns with small-company accounts for £139, including the relevant crypto questions.

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Key facts (checked on 16 October 2026)

How is Bitcoin simply held as an investment taxed?

A company holding Bitcoin as an investment pays Corporation Tax on chargeable gains realised when it disposes of the tokens. An unrealised accounts write-down does not itself create a deductible capital loss. Calculate the tax result separately from the accounts carrying value, then report the relevant gain or loss on the CT600.

The company pays Corporation Tax rather than personal Capital Gains Tax. A realised capital loss belongs with the capital loss rules; it is not a deduction against bank interest or a management expense. The company chargeable gains guide explains how gross gains, losses used and net gains reach boxes 210, 215 and 220.

Keep the acquisition records, disposal details and accounts write-down history. A fall in the market price while the company still owns the same tokens is not, by itself, a disposal loss.

Why does calling Bitcoin an intangible asset not settle the tax?

HMRC's CRYPTO41150 requires two conditions for the Part 8 intangible fixed asset rules: the token must be an intangible asset for accounting purposes and an intangible fixed asset for tax. That second condition needs continuing use. Showing investment Bitcoin as an intangible asset in the accounts does not satisfy both conditions.

The manual uses “for use on a continuing basis” and says tokens “simply held by the company” do not meet the definition. That remains HMRC's position even when holding them forms part of the company's activities. Length of ownership alone does not establish continuing use.

Part 8 takes priority over chargeable gains where it actually applies, but it also has exclusions. Establish the asset's use and the relevant conditions before following accounts debits for tax. Do not select the Part 8 route merely to obtain relief for a market fall.

What happens to an impairment in the accounts?

For Bitcoin held on the chargeable gains basis, an impairment charged in the accounts is added back when reconciling accounting profit to taxable profits. An investment company's management-expense calculation excludes that write-down. The original tax cost remains relevant to the later disposal calculation, rather than the reduced accounts carrying value.

This can leave taxable profits when the accounts show a loss. Bank interest may still be taxable, while the Bitcoin impairment gives no immediate deduction. The bank interest guide explains box 170, and the management expenses guide separates running costs from asset write-downs.

When the tokens are later sold, remove the accounts disposal result from the income reconciliation and include the tax disposal result in its proper place. Otherwise a sale could be counted twice or measured against the wrong cost.

What does a Bitcoin impairment and sale example look like?

Suppose an investment company buys Bitcoin for £30,000 and writes it down to £20,000 without selling. The £10,000 impairment gives no current tax deduction. If it later sells the whole holding for £22,000, the accounts show £2,000 profit, but the tax calculation shows an £8,000 capital loss.

Illustrative assumptions: the Bitcoin was acquired as an investment and is simply held; no trading, income rewards or Part 8 treatment; no fees, other disposals or capital losses. In the impairment year the company has £6,000 bank interest and £2,200 qualifying management expenses. It is a CIHC throughout and continues its investment business.

No capital loss arises from the write-down alone. In the later sale year, the accounting and tax results are different:

The £8,000 loss does not reduce the company's interest income. If there are chargeable gains, allowable capital losses can reduce them under the capital loss rules. The Corporation Tax rates guide explains the 25% CIHC rate used in the example.

When could tokens used in the business fall under Part 8?

Part 8 may apply where tokens are accounting intangible assets acquired for continuing use in the company's activities and the exclusions do not apply. For a non-trading Part 8 asset, a net gain goes in box 195. A net loss arising goes in box 830, with the amount claimed against profits in box 265.

This is a separate route from investment Bitcoin. A non-trading Part 8 loss can be claimed against total profits, in whole or part, within the relevant two-year claim limit. Unused post-1 April 2017 losses retain their identity when carried forward, subject to the applicable conditions and restrictions.

For comparison, assume an asset genuinely qualifies for non-trading Part 8 treatment, with £10,000 allowable write-downs, £6,000 other profits and £2,200 current management expenses. The current management deduction comes first. That leaves £3,800 profits against which to claim the Part 8 loss.

Box 830 reports the loss arising, rather than just the amount used. If there were instead a £4,000 net non-trading Part 8 gain, it would go in box 195. Box 640 is the separate indicator for intangible assets written down or sold; ticking it does not establish that Part 8 applies.

What changes if the company trades in crypto?

A company buying and selling crypto as its trade follows trading stock and trading profit rules rather than treating every sale as an investment disposal. The distinction depends on its activities. This guide covers investment holdings and the separate continuing-use question, rather than working through a crypto trading business's stock calculation.

Taxley's investment route asks whether the company trades crypto or receives other crypto income, including staking, lending, mining or airdrops. Those cases need different treatment and are outside that route. For an investment company, choose “Holds investments” and use the Advanced editor, as explained in the CT600 filing guide.

If the company also holds funds, classify those separately using the Irish ETF dividends guide. A fund's loan relationship treatment does not determine how direct Bitcoin holdings are taxed. Check whether Taxley fits your company before preparing the return.

Frequently asked questions

Does holding Bitcoin for several years prove continuing use?

No. HMRC distinguishes using tokens on a continuing basis from simply holding them. A long holding period does not itself turn an investment into an intangible fixed asset qualifying for Part 8.

Can the company use a Bitcoin capital loss against dividends?

A capital loss is dealt with against chargeable gains, rather than dividend income. Exempt dividends are outside taxable profits anyway. Our dividends received guide explains how those receipts are classified.

Is the sale loss measured against the impaired accounts value?

For the chargeable gains route, the tax calculation uses the relevant tax cost and disposal proceeds, ignoring the accounts impairment. The accounts profit or loss therefore need not match the tax result.

Are boxes 265 and 830 alternatives for the same figure?

No. Box 830 reports the current non-trading Part 8 loss arising. Box 265 reports the amount claimed against profits, which can be smaller. Neither box is used for an ordinary investment capital loss.

General information, not personalised tax or accounting advice.