Your exchange now files a form about you. Make sure it matches yours

Figures relate to tax year 2025-26 (UK) · 2025 (US)

Until recently the American tax system took your word for it on digital asset activity. You reported your disposals, the exchange reported nothing, and the two never had to agree.

That era has ended. Brokers now file an information return showing gross proceeds from every digital asset disposal, and the IRS receives a copy with your name on it.

The form is a significant change for anyone holding digital asset positions across borders. Not because the tax has changed, but because any gap between what the exchange reports and what you report is now visible.

Key takeaways

• Brokers now report crypto disposals on a dedicated information return.
• Gross proceeds came first, with cost basis phased in afterwards.
• Figures often look wrong because basis moved between platforms.
• The form reports proceeds, not gain, so it overstates your income.
• Britain has its own separate reporting regime arriving alongside.
• Wallet by wallet tracking replaced universal pooling.
• A mismatch triggers a notice rather than an assessment.

What is the new reporting form?

An information return filed by brokers showing proceeds from digital asset sales and exchanges made through them. According to IRS guidance, custodial platforms began reporting gross proceeds for transactions from 2025, with cost basis reporting following in a later phase.

It works like the form brokers already file for shares. You receive a copy, the IRS receives a copy, and the system matches them against your return.

The form itself does not change what you owe. It changes who else knows about it.

Who has to file it?

Custodial brokers, meaning platforms that hold assets for you and carry out transactions on your behalf. The large centralised exchanges sit squarely inside that definition and are already filing these forms.

Self-custody wallets and genuinely decentralised protocols sit outside it, because nobody is holding your assets or acting for you. There is no broker to do the reporting.

That boundary produces an odd result. Activity on an exchange is visible and the same activity through a wallet is not, even though both are equally taxable.

A worked example

The figures below are illustrative. They use round numbers so you can follow each step and substitute your own.

Sam is American, lives in Manchester and bought $20,000 of a digital asset on one exchange in 2021. He later moved it to a second exchange and sold it there for $35,000.

The selling platform reports gross proceeds of $35,000, because that is what passed through it. It never saw what he paid, since the acquisition happened elsewhere.

His actual gain is $15,000. If he reports that figure and the IRS sees $35,000 on the form, the system flags a difference of $20,000.

Nothing is wrong with his return. He simply has to show the cost that the form could not.

Why do the numbers look wrong?

Because proceeds are not profit. The form reports what you received on disposal, and your taxable gain is that figure minus what you paid, which the broker often does not know.

Transfers between platforms are the main cause. Move an asset and the receiving exchange knows what arrived but not what it cost you originally.

Basis reporting is being phased in to close that gap, but it only works where the chain of custody stayed within reporting brokers.

The two regimes compared

The table sets out what each side now collects. Both are tightening at once.

What changed about tracking cost?

America moved digital asset tracking to a wallet by wallet basis, so each account holds its own cost pool rather than one universal pool across everything you hold. That matters when you sell from one account while holding the same asset elsewhere.

A transitional allocation let holders assign existing basis across their accounts. Doing it properly mattered, because the allocation then governs every later disposal.

Britain never used a universal pool in the same way, so this particular change is an American one.

How does Britain calculate the gain?

Through its own pooling rules, which group identical assets into a single pool with an averaged cost. Same day and thirty day matching rules apply before the pool is touched.

That produces a different gain from the American calculation on identical transactions. Neither is wrong; they are simply different systems.

Our guide to crypto tax across the US and UK covers the underlying treatment on both sides.

What is Britain doing about reporting?

Building its own framework. According to GOV.UK guidance, platforms must collect identifying details from users and report transactions annually, which brings British digital asset activity into the same kind of visibility.

The two regimes also exchange information internationally, so HMRC will receive data about British residents from overseas platforms and vice versa.

The practical effect is the same on both sides. Undeclared activity stops being invisible.

Does a transfer between your own wallets count?

Not as a disposal, because you still own the asset throughout the move. Shifting coins between wallets you control is not a taxable event in either country, however the transaction looks from outside.

The complication is evidential rather than substantive. A platform seeing an outbound transfer cannot tell whether it went to your own wallet or to a buyer.

Keep records showing both ends of every transfer. Without them a move can look like a sale.

What about staking and lending?

A staking reward is generally income when received, valued at the market price that day, and then form the cost of the asset for a later disposal. Both countries broadly take that approach.

The reporting regimes are less settled here than for straightforward sales. Platforms vary in what they report and when.

Track the date and value of every reward. Reconstructing that from a block explorer afterwards is genuinely difficult.

What happens if your figures differ?

You receive a notice proposing changes rather than an assessment. The system has matched the broker form against your return, found a gap in the digital asset figures and asked you to explain it.

Responding with the cost basis evidence usually resolves it. The gap is almost always proceeds versus gain rather than unreported income.

Our guide to amending a US return covers the correction route where an actual error exists.

Does the ISA or pension shelter apply?

No, because neither wrapper can hold a digital asset directly in Britain. Any exposure through a fund inside a wrapper is a different thing entirely, with its own quite separate treatment.

For an American that distinction matters doubly, since a British fund holding digital assets is likely to be a PFIC with its own punitive regime.

Our guide to the ISA and PFIC problem explains why pooled British products cause trouble.

What records should you keep?

A complete transaction history from every platform you have ever used, closed accounts included, with dates, amounts and values recorded in both currencies. That single file is effectively the whole job.

Exchanges delete history and occasionally collapse entirely. Export annually rather than relying on the platform still existing when you need it.

For 2025 a capital gain on a digital asset is reported in dollars, so each transaction needs a conversion as well as a sterling figure for HMRC.

Does it affect past years?

The reporting looks forward, but the tax never did. Disposals in earlier years were always taxable, and the new digital asset data gives both authorities a clear reason to look backwards.

Correcting an old year voluntarily is substantially better than waiting for a letter. The routes available narrow once contact has been made.

Our guide to streamlined filing covers the American catch-up position.

Does an NFT count as a digital asset?

Generally yes for reporting purposes, though the treatment of the gain can differ. America may tax some collectibles at a higher rate than ordinary capital assets, and whether an NFT qualifies depends on what it represents.

Britain treats most NFTs as chargeable assets in the normal way. The each-asset nature of an NFT means pooling rarely applies to it.

Keep the acquisition record for each one separately rather than as a group.

What about stablecoins?

They are a digital asset like any other, so swapping one for another is a disposal. People routinely assume a stablecoin trade is neutral, simply because the underlying value never moved.

The gain is usually tiny, but the transaction still has to be recorded. High frequency trading between stablecoins produces thousands of small disposals.

Those add up to a reporting burden rather than a tax bill.

Does mining income work differently?

It arrives as income rather than as a gain, valued at the moment you receive it. The mined coin then carries that value as its cost for any later disposal, in both countries.

Where mining is organised enough to look like a trade, Britain may tax it as trading profit instead, which changes the rate and the reliefs available.

Scale and organisation decide which side of that line you fall.

What if an exchange collapses?

You may have a loss, but establishing when it arose and how much it was becomes the real difficulty. A platform freezing withdrawals is not the same thing as an asset becoming worthless.

Britain has a negligible value claim for assets that have become worthless, and America has its own worthless security concept. Both need evidence rather than assertion.

Download your history long before any of that becomes relevant.

Does the broker know you are British?

It knows only what you told it. The certification you signed on opening the account decides which reporting regime applies to you and which tax authority ends up receiving your data.

An American citizen living in Britain is reportable to the IRS regardless of the address on the account. Giving a British address does not change citizenship.

Our guide to the FATCA letter covers how institutions establish this.

How much does getting it wrong cost?

Less in tax than in penalties, as usual. The gain itself is often modest, while a failure to report foreign accounts holding digital asset value carries charges per account per year.

For 2025 the foreign account reporting threshold remains $10,000 across all accounts combined, and whether a foreign exchange account counts has been a live question.

Where the position is unclear, reporting is the cheaper mistake.

How to reconcile it

1. Collect every form issued to you by every platform.
2. Export the full transaction history from each account.
3. Match each reported disposal to your own record of it.
4. Establish the original cost of each asset sold.
5. Apply wallet by wallet basis for the American calculation.
6. Apply pooling and matching rules for the British one.
7. Convert each figure into dollars and into sterling separately.
8. Keep the reconciliation with that year's papers.

Mistakes and penalties we see with digital asset reporting

The first is reporting the form figure as the gain. Proceeds are not profit, and copying the number across overstates your income substantially.

The second is assuming a transfer between your own wallets is invisible. It is not, and without records it looks like a disposal.

The third is using one calculation for both countries. The pooling rules differ and the two gains will not match.

The fourth is losing access to an old exchange. Export the history while the account still works.

How US UK Tax Accountants helps

We rebuild the transaction history across every platform, run the two calculations separately under each set of rules, and reconcile both against whatever the brokers reported. Then we document the difference before anybody asks about it.

Where earlier years went unreported, we look at the catch-up routes still open. Our US federal return service covers the filing.

If a form has arrived showing a number you do not recognise, get in touch. It is usually proceeds rather than profit.

Last reviewed 13 October 2026. This article is general information and not personal tax advice. Every portfolio turns on its own facts, so take advice on yours before filing.