Loss harvesting is selling crypto at a loss to offset gains elsewhere. Here are strategies beyond the basics.
The Order of Offsetting
| Order | What You Offset |
|---|---|
| 1 | Same-year gains |
| 2 | Future gains (carry forward) |
| 3 | No limit on carry forward |
Losses must be reported within 4 years of the tax year they occurred.
Strategy 1: Portfolio Rebalancing with Losses
Instead of selling winners and paying CGT, sell losers to fund rebalancing.
| Action | Tax Effect |
|---|---|
| Sell ETH at £5K loss | Realises loss |
| Buy BTC with proceeds | New position |
| Loss offsets other gains | Reduces CGT |
Strategy 2: Bed and Breakfasting Within 30 Days
| Rule | Detail |
|---|---|
| Standard rule | Buy within 30 days = no allowable loss |
| SIPP/ISA exception | Buy in ISA within 30 days = loss allowed |
| spouse exception | Buy in spouse’s name = loss allowed |
Strategy 3: Spouse Loss Harvesting
| Action | Effect |
|---|---|
| Crystalise loss in higher-earner’s name | Offsets gains at 20% |
| Transfer assets before disposal | Spouse exemption — no gain/no loss |
| Spouse sells at loss | Loss in their name |
Strategy 4: Match Losses with High-Gain Assets
| Asset | Gain/Loss |
|---|---|
| SHIB | +£15,000 gain |
| ETH | -£5,000 loss |
| Result | Net gain £10,000 |
Realise the ETH loss to offset the SHIB gain.
Strategy 5: Staking Loss Harvesting
| Action | Tax Effect |
|---|---|
| Unstake SOL | No disposal |
| Sell SOL at a loss | Realises loss |
| Buy back SOL | New cost basis |
The loss can offset other gains. If you buy back within 30 days, the loss is not allowed.
Strategy 6: Cross-Tax Year Harvesting
| Year | Action |
|---|---|
| 2025-26 | Realise losses to carry forward |
| 2026-27 | Use carried-forward losses against gains |
| Result | Defer tax to a later year |
What Doesn’t Work
| Strategy | Why |
|---|---|
| Selling at loss and buying same day | B&B rule — loss denied |
| Selling at loss in ISA | No loss available to report |
| Selling at loss but not reporting | Loss lost forever |
| Loss on non-allowable asset | Not all tokens are allowable |
Loss Harvesting Checklist
| Check | Action |
|---|---|
| Are gains elsewhere? | Yes → harvest to match |
| Any losses expiring? | Unused losses from 4+ years ago |
| Can spouse help? | Transfer + sell in their name |
| B&B rules apply? | Wait 31 days or use ISA |
| Track all losses | Report within 4 years |
Bottom Line
Loss harvesting reduces CGT by offsetting gains. Use losses to rebalance, offset high-gain assets, or carry forward to future years. Watch the 30-day B&B rule. Transfer to spouse for additional harvesting. Report losses within 4 years. Losses not reported are lost forever.
Making loss harvesting work in practice
The value of advanced loss harvesting is timing and structure rather than simply selling losers. Because losses offset same-year gains first and then carry forward with no cap, the aim is to match losses against gains in the tax year where they save the most — or to bank them for a year when you expect a big gain. That makes the crop of the tax year an important planning moment, particularly if you are sitting on unrealised losses and know gains are coming.
The 30-day bed and breakfasting rule is the constraint that most people trip over. Selling at a loss and buying the same asset back within 30 days denies the loss, so the obvious path when you want to hold the same position is to wait 31 days, or to use the ISA/SIPP exception by repurchasing inside a tax wrapper, where the loss on the original disposal remains allowable. The spouse route works the same way: transfer the asset to your spouse before disposal, so the loss is crystallised in their name and can be used against their gains.
Not every token is a candidate. Some assets are not allowable for capital gains purposes, and a repositioning into a new position must still respect the rules around what counts as a disposal. Staking adds its own wrinkle — unstaking is not a disposal, but selling staked tokens at a loss is, and buying back within 30 days re-triggers the same denial rule.
Finally, discipline around reporting matters more than the strategy itself. With a four-year reporting window and the permanent loss of unreported losses, the error that destroys the value of good harvesting is failing to notify HMRC in time. Keep a dated schedule of each realised loss, what it was offset against, and any carry-forward balance, and file promptly.