Crypto Taxes UK

HMRC rules, CGT allowance, Section 104 pooling, staking treatment, Self Assessment.

Tax year 2025 · filing year 2026

Reviewed by Stephan Kulik · Last updated: 2026-04-21 · How we rank

Short answer

UK crypto is property for tax. Disposals (sell, swap, spend) trigger Capital Gains Tax. Annual CGT allowance £3,000 for 2024/25 (verify current); CGT rates 10%/20% depending on income band. Staking + airdrops earned via work = Income Tax at receipt. Cost-basis method: Section 104 pooling with same-day and 30-day rules. Report via Self Assessment. Not tax advice — consult an accountant.

HMRC's treatment

HMRC's cryptoasset manual treats crypto as a chargeable asset for CGT. Most retail crypto activity (buying, holding, selling, swapping) falls under CGT. Staking rewards, mining income, and airdrops earned in exchange for action are Income Tax. Large-scale, frequency-based activity may be reclassified as trading (different rules).

Capital Gains Tax

Rates as of 2024/25 (verify current):

Basic rate taxpayers: 10% on gains
Higher rate and additional rate taxpayers: 20% on gains
Annual exempt amount: £3,000 per tax year

CGT is paid via Self Assessment. Due date: 31 January following the tax year end (e.g., 2024/25 tax year — file by 31 January 2026). Payment on account may apply for higher-gain years.

Section 104 pool

HMRC's default cost-basis method pools all holdings of the same token. Each purchase adjusts the average cost. When you dispose, gain = sale proceeds minus the pooled average cost × units sold.

Exceptions:

Same-day rule: If you acquire and dispose of the same token on the same day, those units match first (bypassing the Section 104 pool).
30-day rule (bed-and-breakfasting): If you dispose of tokens and re-acquire the same tokens within 30 days, the re-acquisition matches against the disposal first.

These rules prevent artificial loss harvesting. Most CGT tools (Koinly, CoinTracking, Recap — UK-focused) automate the pooling calculation.

Income Tax scenarios

Staking rewards: miscellaneous income at GBP FMV on receipt. Income Tax rates apply (20%/40%/45%).
Mining: if hobby-scale: miscellaneous income; if business-scale: trading income + Class 2/4 NI.
Airdrops from promotional activity (did something to earn): miscellaneous income at receipt.
Airdrops received without action: typically not immediately taxable; cost basis = zero; full proceeds taxed as capital gain on later disposal.
Crypto received as payment for work: employment income if employee, self-employment income if freelancer. PAYE or Self Assessment reporting.

DeFi

HMRC 2024 guidance on DeFi clarified some areas: lending crypto to a protocol in exchange for a receipt token (like aUSDC on Aave) is typically a disposal + re-acquisition. Interest/yield earned is miscellaneous income. The area remains in evolution; fact patterns vary. DeFi-heavy users should engage a crypto-specialist accountant.

Records to keep

Date and time of each transaction
Type (buy, sell, swap, reward, income)
Asset and quantity
GBP value at transaction time (from exchange or Koinly/independent oracle)
Counterparty (exchange name, wallet address)
Fees
Supporting records (exchange exports, bank statements)

Retain records for 6 years from the relevant tax year-end (HMRC retention requirement).

Self Assessment reporting

Crypto capital gains are reported on the Self Assessment SA100 with supplementary pages. Since April 2024, there has been a dedicated "cryptoassets" section in the SA100 — use it rather than the general "other" boxes. Deadline: 31 October (paper) or 31 January (online) following tax year end.

Where to hold crypto in the UK

UK has an FCA register for crypto firms. Several platforms have exited UK retail (Binance, Gemini in 2026); others remain (Kraken, Bitstamp, Revolut, Coinbase UK). See best crypto banks in UK.

Disclaimer

This page is general information only, not tax advice. UK tax law changes frequently (CGT allowance has been reduced multiple times recently). Consult a qualified accountant familiar with crypto before filing. See terms.

Frequently asked questions

How does HMRC tax crypto in the UK? +

HMRC treats crypto as property for tax purposes. Most disposals (sell, swap, spend) are Capital Gains Tax events. Gains above your annual CGT allowance (£3,000 for 2024/25; verify current) are taxed at 10% (basic rate) or 20% (higher/additional rate). Certain activities (mining, staking, airdrops earned via work) are treated as ordinary Income Tax + National Insurance.

What is the CGT allowance in 2026? +

The CGT annual exempt amount was reduced to £3,000 for 2024/25 (from £6,000 in 2023/24 and £12,300 before). Check the current year figure — HMRC sets this annually. Gains under the allowance are tax-free; above it, CGT rates apply.

What is Section 104 pooling? +

HMRC's default cost-basis method for crypto is "Section 104 pooling" — similar to an average-cost basis. All holdings of the same token are pooled; the average cost per unit is recalculated on every acquisition. Exceptions: the "same-day rule" (shares acquired and disposed of on the same day pool separately) and "bed-and-breakfasting rule" (shares acquired within 30 days after a disposal pool with that disposal). These rules are identical to share-matching rules for listed equities.

Are crypto-to-crypto swaps taxable in the UK? +

Yes. HMRC treats a swap (BTC for ETH) as a disposal of BTC at its fair market value in GBP on the swap date. The new ETH acquisition is at the same GBP value. If the BTC has gained since acquisition, the gain is realised and CGT applies (subject to the annual allowance and same-day/30-day rules).

How is staking taxed in the UK? +

Staking rewards are generally taxable as miscellaneous income at GBP fair market value on receipt date. Income Tax rates apply (20% / 40% / 45% depending on total income). When you later sell the staked rewards, a separate CGT event occurs on any additional gain/loss since receipt. If your staking activity is large-scale and business-like, it may be reclassified as trading income (different rules, Class 2 + Class 4 NI potentially apply).

Do I need to report crypto if I didn't sell? +

Holding crypto is not a taxable event. You must report if: (a) you disposed of crypto and gains exceeded the annual CGT allowance, OR total disposals exceeded 4× the allowance in the year; (b) you received staking/lending income above the trading allowance (£1,000); (c) you received crypto as payment for goods or services (income); (d) you received crypto from airdrops in exchange for action (income). Report via Self Assessment.

What about NFTs? +

HMRC 2022 guidance treats NFTs as chargeable assets for CGT, similar to crypto. Creating and selling an NFT may be trading income if business-like. Buying an NFT as an investor and later selling is CGT. Separately: VAT treatment of NFT creators is contested and evolving.