Negligible value claims for crypto, dead coins are worth money

Definition

A negligible value claim is the mechanism, under section 24 of the Taxation of Chargeable Gains Act 1992, for turning an asset that has become almost worthless into a usable capital loss without selling it. You still own the tokens, nobody will buy them, and the claim treats you as having disposed of and immediately reacquired them at their negligible value, crystallising the loss on paper where it can offset real gains.

Why crypto holders should care more than most

Portfolios accumulate corpses, rugged tokens, abandoned projects, chains that stopped. Each one is a loss your gains never met because no disposal ever happened. The claim is how those losses stop being decorative.

The lost-keys case, precisely

HMRC’s manual at CRYPTO22400 is specific. Misplacing your private key does not by itself trigger a disposal, the tokens still exist on chain, you simply cannot reach them. But where there is no prospect of recovering access, the manual points to the negligible value claim, and on acceptance you are treated as having disposed of and reacquired the tokens, in the manual’s framing able to “crystallise a loss”.

The conditions that actually bite

The asset must have become of negligible value while you owned it, buying something already worthless buys a cost, not a claim. The claim needs making, none of this is automatic, and once crystallised the loss follows the normal rules, offsetting gains and needing claiming within the usual windows. Timing has strategy in it too, a claim can generally be directed at the year it is made, which pairs usefully with a year of large gains.

What the paperwork looks like

A claim identifies the asset, the amounts, when and how it became negligible, and the value claimed. The dead token claim checker walks a holding through the conditions and works out what the loss would be worth against your gains, before you write anything down.

General information, not advice. Whether a specific token’s state satisfies the conditions, and behaviour around marginal cases, is professional territory, the vetted directory is there.

For the letter itself, gains.tax builds one from your actual holdings, alongside the gifts, losses and claims report, out of the history you import, computed like everything else on your machine and free under 1,000 transactions. Dead tokens are the one part of a portfolio that improves at tax time, provided the working exists.