Lost Keys or Stolen Crypto: Can You Claim a UK CGT Loss?

Updated 17 October 2026

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Short answer: HMRC's manual says misplacing a private key is not a disposal for CGT: the key and tokens still exist on the ledger. If you can show there is no prospect of recovering the key or accessing the tokens, a negligible value claim could be made; if HMRC accepts it, you're treated as disposing of and re-acquiring the tokens so a loss can be crystallised. HMRC also says theft is not a disposal (you still own the asset and have a right to recover it), so victims of theft cannot claim a loss as a disposal. However, HMRC's Capital Gains Manual (CG13155) says that if there is no likelihood the asset will be recovered, a negligible value claim under section 24(2) TCGA 1992 would be competent; this would not apply where the loss is covered by insurance, because the charge under section 22(1) then overrides the claim.

Fraud and scams (HMRC's wording)

• Contracted to acquire tokens but didn't receive them: you may not be able to claim a capital loss.
• Received tokens that later became worthless: you may make a negligible value claim.
• Tokens that were worthless when acquired: a negligible value claim won't be allowed; you can still dispose of them by other means to crystallise a loss.

What a negligible value claim must contain (CRYPTO22500)

Because tokens are pooled, the claim must cover the whole section 104 pool for that token, not individual tokens. It must state the asset, the amount it's treated as disposed of (which may be £nil) and the date of the deemed disposal and immediate re-acquisition. The loss is reported to HMRC, and the claim can be made at the same time as reporting the loss.

Timing and conditions (CG13125, CG13130)

• HMRC says there is no requirement to make the claim within a specified time of the asset becoming of negligible value.
• The claim can only be made by the owner of an asset that still exists; if the asset has ceased to exist there will have been an actual disposal instead.
• The asset must be of negligible value at the date of the claim and at the date of the deemed disposal and re-acquisition. "Negligible" isn't defined in the legislation; HMRC takes it to mean "worth next to nothing".
• The general rule (Williams v Bullivant) is that the deemed disposal date is the date HMRC receives the claim; section 24(2) TCGA allows an earlier time if its conditions are met (the conditions aren't set out in the page read).
• If the claim produces a loss, you must also notify the loss to HMRC for it to be an allowable loss. The notice is separate from the claim but can go in the same return or letter.

Practical points

1. Keep evidence of attempts to recover the key or tokens.
2. Negligible value claims are covered in our SA page.
3. Records for reconciliation: reconcile before 31 May 2027.

Made-up example

You lose the paper with your seed phrase for tokens bought at £4,000. Nothing happens for CGT. Later you can show there's no way to recover access; if HMRC accepts a negligible value claim, you are treated as selling at the negligible value and re-buying, giving a loss of roughly the cost less that value.

FAQ

Does a hack on an exchange count as theft? The manual says theft isn't a disposal; individual cases may differ. If insured, CG13155 says the insurance charge overrides a negligible value claim.

Is there a time limit for the claim? CG13125 says there is no requirement to claim within a specified time of the asset becoming of negligible value. The loss itself must still be notified to HMRC; see the loss-claim window on our SA page.

What we could not verify

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