Guides · Last reviewed 30 October 2026 · 5-minute read

Transfers between my own wallets show a gain: why, and how to fix it

Moving crypto between wallets and exchanges you own is not a sale. HMRC says there is no disposal when you keep ownership throughout. Yet it is the most common reason a crypto tax report shows gains that never happened.

What HMRC says

HMRC's Cryptoassets Manual lists what counts as a disposal: selling tokens for money, swapping them for another token, using them to pay for goods or services, and giving them away (except to a spouse or civil partner). It also says there is no disposal if you keep beneficial ownership of the tokens throughout, and gives moving tokens between your own wallets as the example.

Why tax software gets it wrong

Software only sees what you import. To recognise a transfer, it needs both sides: the tokens leaving one account and arriving in another. If either side is missing or looks different, it guesses:

• The outgoing side looks like a sale, so it records a disposal at that day's value
• The incoming side looks like a new purchase, or worse, coins with no cost at all

The usual causes:

• A wallet or exchange you never imported, such as an old hardware wallet or a closed exchange
• Different amounts on each side because of a network fee (sent 2.40, received 2.39)
• Different timestamps or time zones between exchanges
• Bridges between blockchains, where the token arrives under a different name or wrapped (ETH becomes WETH)
• The same transfer labelled differently in an exchange's API and CSV exports

What it does to your figures

Say you move 2.40 ETH from a hardware wallet to Kraken. If the software can't match the two sides, it may record a sale of 2.40 ETH at that day's price and a fresh purchase on Kraken. If ETH has risen since you first bought it, that invents a gain you don't owe tax on: in our illustrative example, £4,812. It can also go the other way and invent a loss you couldn't defend if HMRC asked.

It also distorts every later sale. HMRC requires one pool for each type of token, with an average cost. A transfer booked as a sale and a new purchase changes that average, so the cost of every later disposal comes out wrong.

How to fix it

These steps work in whichever crypto tax software you already use, such as Koinly, Recap or CoinTracker. Most have a way to mark two entries as a transfer between your own accounts.

1. List every wallet and exchange you have used, including ones you have closed or no longer use.
2. Import all of them into your software, so both sides of each transfer exist. For a closed exchange, look for old export files, emails or a data request to the exchange.
3. Match each outgoing transfer to its incoming side: same token, close amounts, close times. Mark them in your software as transfers, not sales or purchases.
4. Record the difference as a network fee. HMRC's guidance doesn't spell out how fees on transfers between your own wallets are treated, so note each fee and the treatment used. If your fees are significant, ask your accountant.
5. Link bridges and wrapped tokens: the token that left one chain with the one that arrived on the other.
6. Check your holdings: after matching, the quantity of each token in your software should equal what you actually hold.
7. Keep the evidence: transaction IDs and wallet addresses showing both sides are yours, in case HMRC asks.

Prefer to hand it over?

You don't have to do this yourself, or try software first. Matching a few transfers is manageable; hundreds across several chains, or wallets you can no longer open, can take days, and one missed match changes your figures. We can do the whole reconciliation for you: every transfer matched, every fee recorded, and every change listed in your report with the HMRC rule behind it.

Sources

• HMRC Cryptoassets Manual, CRYPTO22100: what is a disposal
• HMRC Cryptoassets Manual, CRYPTO22200: pooling
• HMRC Cryptoassets Manual, CRYPTO22150: allowable expenses

General information, not tax advice. Your own situation may differ; if you are unsure, speak to an accountant.