Guides / Glossary / Negligible value claim
Glossary

Negligible value claim: lost bitcoin and UK tax

A UK claim that treats an asset as sold and bought back at a very low value, so a loss can be recognised without a sale.

Education only

Definition. A claim under section 24 of the Taxation of Chargeable Gains Act 1992 that an asset has become of negligible value. If accepted, the owner is treated as disposing of it and reacquiring it at that value.

United KingdomGo to United States

How it works

This is a UK term. Normally a capital loss arises only when an asset is disposed of. Section 24 of the Taxation of Chargeable Gains Act 1992 provides an exception: where the owner claims that an asset has become of negligible value, the asset is treated as sold and immediately reacquired at the value stated in the claim. For Corporation Tax, the claim can specify an earlier time, on or after the first day of the earliest accounting period ending not more than two years before the claim, if the asset was already of negligible value then.

How HMRC applies it to bitcoin

HMRC's Cryptoassets Manual says that misplacing a private key does not count as a disposal, because the key and the tokens still exist. If it can be shown that there is no prospect of recovering the key or accessing the tokens, a negligible value claim could be made. Because exchange tokens are pooled, HMRC says the claim needs to be made for the whole pool, not individual tokens. HMRC treats theft differently: it does not regard theft as a disposal, so there is no allowable loss for the theft itself.

Why it matters for a company

A company that genuinely cannot reach its bitcoin needs evidence before it claims: what was lost, when, what was tried to recover it, and why recovery is not possible. Our judgement, not a rule: where only part of a holding is lost, how the claim interacts with the pool is a question for the company's adviser. With a 2 of 3 multisig, losing one key does not lose the bitcoin, so the right response is usually to move the funds to a fresh wallet, not to make a claim.

Example only, fictional. A company held bitcoin in a single wallet whose only backup was destroyed in a fire. After documented recovery attempts fail, its adviser prepares a negligible value claim for the pool, with the evidence filed alongside the Corporation Tax return.

In the US

US rules use different concepts, such as losses under section 165. See the US section of the lost or stolen guide.

Common mistakes

Sources

Primary sources only. Each link was checked on 9 November 2026. Rules change, so confirm the current version with your adviser.

  1. legislation.gov.ukTaxation of Chargeable Gains Act 1992, section 24: assets lost or destroyed, or of negligible value
  2. HMRCCryptoassets Manual CRYPTO41450: S24 and negligible value (claims for the whole pool)
  3. HMRCCryptoassets Manual CRYPTO41500: losing private keys
  4. HMRCCryptoassets Manual CRYPTO41550: being defrauded (theft is not a disposal)
  5. HMRCCryptoassets Manual CRYPTO41400: Corporation Tax on chargeable gains, capital losses
Education, not advice.

This is general information and education only. It is not financial, investment, tax, accounting, legal or regulatory advice, and it is not a recommendation to buy, sell or hold bitcoin or any other asset. It does not take account of your circumstances or those of your company. You must obtain your own official professional advice to confirm this information is correct before acting on it.

Rules change. This information is correct to our understanding at the last-reviewed date, but it may be incomplete or out of date, and official sources take precedence. Bitcoin is volatile. A company that buys it could lose some or all of the money it puts in.

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