UK Tax Reporting FAQs: Prior Tax Years for Individual Clients

Kraken may be required to provide certain prior-year account and transaction information for individual clients to HM Revenue & Customs (HMRC) in response to a formal information request.

This request applies only to individual clients and may cover account and transaction information for the following prior UK tax years:

Yes. This reporting applies only to individual clients. It does not apply to entity accounts.

This reporting is being made in response to a notice issued by HMRC under Paragraph 1 of Schedule 23 to the Finance Act 2011.

Schedule 23 gives HMRC data-gathering powers that allow it to require a relevant data-holder to provide relevant data. The notice is supported by The Data-gathering Powers (Relevant Data) Regulations 2012 (SI 2012/847), which help define the types of data that may be requested.

This is a Schedule 23 data-holder notice.

No. This reporting is not being made under the Crypto-Asset Reporting Framework, or CARF. CARF is a separate reporting framework that applies prospectively. This FAQ relates to prior-year reporting for individual clients where HMRC has requested information from Kraken under a Schedule 23 data-holder notice.

The HMRC request may cover the following UK tax years:

The UK tax year runs from 6 April to 5 April of the following year.

Only individual clients are in scope.

The reporting is generally based on whether an individual client had £5,000 or more in relevant activity for a particular crypto-asset or fiat currency and transaction type during one or more of the covered UK tax years.

For this purpose, activity is aggregated separately by:

• individual client;

• UK tax year;

• crypto-asset or fiat currency, as applicable; and

• transaction type.

For purposes of this HMRC request, relevant activity is aggregated separately by individual client, UK tax year, asset or currency, and transaction type.

The eight transaction types subject to aggregation are:

If an individual client has £5,000 or more of activity for a particular crypto-asset or fiat currency and transaction type during a covered UK tax year, that activity may be included in the information reported to HMRC.

For example, BTC crypto-to-fiat out and BTC crypto transfer out are aggregated separately because they are different transaction types. Similarly, BTC crypto-to-fiat out and ETH crypto-to-fiat out are aggregated separately because they involve different crypto-assets.

No. The threshold is not applied to all activity across the account as a single combined amount. Instead, relevant transactions are aggregated per crypto-asset or fiat currency and per transaction type for each covered tax year.

For example:

No. The threshold is based on aggregated transaction activity for a specific crypto-asset or currency and transaction type, not necessarily your taxable gain, profit, income, or account balance.

This means the threshold may be reached even if you did not make a profit, or even if your net gain was much lower than £5,000.

Staking rewards and airdrops are not reported when they are received under this prior-year HMRC reporting.

However, if you later sell, exchange, or otherwise dispose of staking rewards or airdropped crypto-assets, that later transaction may be included in the applicable transaction type if it falls within the scope of HMRC’s request and the relevant £5,000 per asset, per transaction type, per tax year threshold is met.

For example, if you receive staking rewards in ETH, the receipt of the ETH staking rewards is not reported under this request. If you later sell that ETH for GBP, the sale may be included as crypto to fiat out if the relevant threshold is met.

Deposits and withdrawals are not necessarily taxable by themselves. For example, moving crypto-assets between your own wallets may not create a taxable disposal.

However, crypto and fiat transfers may still be relevant to HMRC’s information request because they can help HMRC understand account activity, asset movements, and transaction history.

For individual clients who are in scope, the information is limited to individual clients in the U.K. subject to reporting thresholds, and may include information such as:

• Name

• Address

• Email address

• Account identifier

• Aggregated activity by crypto-asset or fiat currency and one of the applicable transaction types

No. Kraken cannot confirm what, if any, specific information about an individual client was shared with HMRC in response to this request.

Where Kraken is legally required to provide information to HMRC, the information provided depends on the scope of the HMRC request, the applicable reporting criteria, and Kraken’s records for the relevant tax years.

Kraken also cannot provide individualized tax reporting determinations, confirm whether a specific client was included in the HMRC submission, or provide tax advice regarding the information HMRC may have received.

Not necessarily. Receiving this notification, or having information reported to HMRC, does not automatically mean that you owe tax or that you made an error.

The £5,000 threshold is not a tax liability threshold. It is used for determining whether certain individual client activity may be included in reporting to HMRC.

Your actual UK tax position depends on your personal circumstances, including your gains, losses, income, exemptions, residence status, and other activity.

No. This is not the same as receiving a U.S. Form 1099 or another tax form.

Kraken provides account records, transaction history, or other reports that can help you review your activity, but you remain responsible for determining whether you need to report crypto-asset activity to HMRC.

No. Transaction information provided to HMRC may not equal your taxable gain, loss, or income.

For example, aggregate transaction data may show aggregated trades, deposits, withdrawals, transfers, or later sales of staking rewards or airdropped crypto-assets, but it does not reflect:

• activity or accounts if below reporting thresholds;

• distinct transactions;

• your cost basis;

• gains/losses;

• income from staking or airdrops;

• all fees;

• activity on other exchanges;

• self-custody wallet activity;

• transfers between wallets;

• UK-specific tax calculations, such as pooling rules; or

• other personal tax facts.

You should not assume that information reported to HMRC is the same as your taxable gain, loss, or income.

Kraken’s records only reflect activity on Kraken. They may not include your full crypto-asset history.

If you transferred crypto-assets into or out of Kraken, your complete tax position may depend on records from other exchanges, wallets, or platforms. You may need to consolidate activity across multiple platforms to determine your UK tax position.

If you need help reviewing your crypto-asset activity for the 2022–2023, 2023–2024, or 2024–2025 UK tax years, you may wish to consider using a crypto tax calculation service.

A crypto tax calculation service may help you:

• import Kraken transaction history;

• combine activity from other exchanges, wallets, and platforms;

• identify missing cost basis;

• calculate potential gains, losses, or income;

• apply UK-specific tax calculation methods; and

• prepare information that may assist with UK tax reporting.

Kraken does not endorse any particular tax calculation service and does not provide tax, legal, or accounting advice. You remain responsible for reviewing your records and determining whether your crypto-asset activity was correctly reported.

You may wish to:

1. Download your Kraken account and transaction history for the covered tax years.

2. Review your activity for the 2022–2023, 2023–2024, and 2024–2025 UK tax years.

3. Reconcile Kraken activity with any other wallets, exchanges, or DeFi platforms you used.

4. Consider using a crypto tax calculation service to help organize and calculate your activity.

5. Consult HMRC guidance or a qualified UK tax adviser.

You may still want to review your records to confirm that your tax return included all relevant crypto-asset activity for the covered tax years.

If your return was complete and accurate, no further action may be needed. If you identify an error or omission, you should consult a tax adviser or HMRC guidance on how to correct it.

No. Kraken cannot determine your UK filing obligations.

Whether you need to file a Self Assessment tax return or otherwise report crypto-asset activity depends on your personal circumstances, including your total gains, income, losses, residence status, and other tax facts.

No. Kraken does not provide tax, legal, or accounting advice and cannot calculate your UK tax liability.

Kraken may provide account history, transaction records, or other information that can help you review your activity. However, you are responsible for determining how your crypto-asset activity should be reported for UK tax purposes.

HMRC may contact individuals where it believes crypto-asset activity may not have been fully reported.

Receiving a letter or message from HMRC does not necessarily mean you are under formal investigation, but it should be taken seriously. You should review your records and consult a qualified tax adviser if you are unsure how to respond.

If you need access to your account history, please contact Kraken Support.

We may be able to help you access available account records, subject to our verification and security procedures.

You can download your account history and transaction records from your Kraken account. These records may help you reconcile your activity and prepare your UK tax reporting. You can view your Kraken transaction history via the Documents Center on the website (for full records) or the Activity tab in the app.

Be cautious of emails, texts, or calls claiming to be from HMRC or Kraken.

Kraken will not ask you for your password, two-factor authentication codes, or seed phrases. HMRC will not ask you to transfer crypto-assets to a wallet or make payment in crypto.

If you are unsure whether a message is genuine, go directly to the official Kraken or HMRC website rather than clicking links in the message.

No. Kraken does not provide tax, legal, or accounting advice.

The information in this article is general and is not a substitute for professional advice. You should consult HMRC guidance or a qualified tax adviser if you have questions about your individual circumstances.