If it really is true that 1 in 10 people in the UK have exposure to cryptos, and if they have all dutifully been reporting their currency gains then come the end of January 2022, HMRC will be enjoying some sensational capital gains tax receipts. They’ve probably already got the champagne out in Parliament Street.
Now, if you are a crypto investor sitting on substantial gains, and you’re thinking well I haven’t cashed in my holdings so this won’t affect me, you may need to start thinking fast about how you will fund a tax bill. Similarly, If you are Dogecoin holder nursing a hefty loss thanks to Elon Musk's comments at the weekend declaring it a hustle, don't assume you are off the hook for tax. If you've been trading in and out of this joke crypto, and "realised" gains along the way even if only in a digital sense, then depending on the size of those gains, you could be facing a large tax bill.
Any crypto transaction that locks in a gain is treated as a disposal for capital gains tax purposes. Selling your crypto assets for real rather than digital money is obviously a disposal but so is exchanging one type of coin for another, a common feature of crypto investing. In a rising market, every transaction you make is likely to crystallise gains even if you're not turning them into hard cash. However, cryptocurrency holdings that have been left alone, on the exchange or in a wallet, won't give rise to a tax bill until you make a disposal.