Quick answer
The amount of crypto gains you can make each year before tax kicks in — a valuable planning threshold to know and use.
Tax Filing
Australia
Canada
Germany
United Kingdom
Tax-Free Threshold
The annual amount of capital gains or income a taxpayer can realise before tax becomes payable — varies significantly by jurisdiction.
AustraliaCanadaGermanyUnited KingdomUnderstanding Tax-Free Threshold on crypto
A tax-free threshold (also called an annual exempt amount or capital gains allowance) is the amount of capital gains or income a taxpayer can receive each year without owing tax. For crypto investors, this threshold defines how much profit can be realised before triggering a tax liability. Thresholds vary by jurisdiction and asset type: the UK had a £12,300 CGT annual exempt amount in 2022–23, which HMRC has since reduced sharply to £3,000 for 2024–25. Australia has no equivalent CGT threshold but taxes below the income tax-free threshold are not liable. Germany exempts crypto gains under €600.
A tax-free threshold (also called an annual exempt amount or capital gains allowance) is the amount of capital gains or income a taxpayer can receive each year without owing tax. For crypto investors, this threshold defines how much profit can be realised before triggering a tax liability. Thresholds vary by jurisdiction and asset type: the UK had a £12,300 CGT annual exempt amount in 2022–23, which HMRC has since reduced sharply to £3,000 for 2024–25. Australia has no equivalent CGT threshold but taxes below the income tax-free threshold are not liable. Germany exempts crypto gains under €600.
What this means for your crypto activity
Tax-free profit taking
Realising gains just below the annual exempt amount allows tax-free profit taking each year.
UK allowance reduced
The UK CGT allowance has been cut from £12,300 (2022–23) to £3,000 (2024–25) — a significant reduction in planning headroom.
Germany low bar
In Germany, crypto gains under €600 per year are fully exempt — a very low bar for active traders.
Couples may double threshold
Married couples or civil partners can in some jurisdictions use both partners' thresholds, effectively doubling the tax-free amount.
Losses reduce taxable gain
Carry forward losses reduce the gain that counts against the threshold.
- Realising gains just below the annual exempt amount allows tax-free profit taking each year.
- The UK CGT allowance has been cut from £12,300 (2022–23) to £3,000 (2024–25) — a significant reduction in planning headroom.
- In Germany, crypto gains under €600 per year are fully exempt — a very low bar for active traders.
- Married couples or civil partners can in some jurisdictions use both partners' thresholds, effectively doubling the tax-free amount.
- Carry forward losses reduce the gain that counts against the threshold.
Seeing it in action
Example scenario
Claire has realised £4,500 in crypto gains during 2024–25. The UK CGT annual exempt amount is £3,000. Her taxable gain is £1,500. As a basic rate taxpayer, she pays 18% CGT on £1,500 — a bill of £270. In the prior year (2022–23) the same £4,500 gain would have been fully covered by the £12,300 allowance, resulting in zero tax.
How this works across jurisdictions
- Australia
There is no dedicated crypto or CGT tax-free threshold, meaning net capital gains are added directly to your taxable income. No tax is owed if your total combined personal income remains below the $18,200 tax-free floor. Income immediately exceeding this floor is subject to a progressive marginal tax rate starting at 16% (for incomes up to $45,000).
- Canada
There is no distinct capital gains tax-free threshold for crypto assets, resulting in a two-tier capital gains inclusion rate: profits up to $250,000 have a 50% inclusion rate, while any net gains exceeding $250,000 in a calendar year have a 66.67% (2/3) inclusion rate. Your overall tax burden can be offset by the federal Basic Personal Amount of $16,452 (for individuals earning $181,440 or less).
- Germany
Short-term crypto gains (held under 1 year) are completely tax-free if your total annual profit remains under the €1,000 Freigrenze exemption limit; if your total short-term profit exceeds this amount by even one cent, the entire gain is taxed at your progressive income tax rate (14%–45%).
- United Kingdom
The Capital Gains Tax (CGT) annual exempt amount is capped at £3,000 for individuals; gains exceeding this threshold are taxed at 18% for basic-rate taxpayers or 24% for higher-rate taxpayers.
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