Yes, in many jurisdictions, including the UK, you can be taxed on cryptocurrency transactions even if you don’t convert the crypto into cash. The tax liability doesn’t necessarily depend on converting cryptocurrency into fiat currency (like pounds sterling). Instead, it often arises from the realisation of a gain, which can occur in several ways:

Trading One Cryptocurrency for Another: If you exchange one cryptocurrency for another, you might incur a capital gains tax liability. This is because you are effectively ‘disposing’ of one asset (the cryptocurrency you give away) and acquiring another. The gain or loss for tax purposes is calculated based on the increase or decrease in value of the cryptocurrency you dispose of, from the time you acquired it to the time of the trade.

Using Cryptocurrency to Purchase Goods or Services: If you use cryptocurrency to buy goods or services, this can also be considered a disposal, potentially resulting in a capital gains tax event. The gain or loss would be calculated based on the value of the cryptocurrency at the time of the transaction compared to when you initially acquired it.

Gifting Cryptocurrency: Depending on the amount and whom you gift it to (excluding spouses or civil partners), gifting cryptocurrency can trigger a capital gains tax event.

It’s important to note that simply holding cryptocurrency (i.e., not engaging in any transactions or disposals) does not typically trigger a tax liability. It’s the disposal or transaction involving the cryptocurrency that can create a taxable event.

Tax laws and regulations regarding cryptocurrency can vary greatly depending on the country and are subject to change. Therefore, it’s advisable to consult with a tax professional who is knowledgeable about the current cryptocurrency tax laws in your jurisdiction to get accurate and personalised advice.