Disclaimer: This guide is for informational purposes only and does not constitute tax or legal advice. UK tax law changes frequently. Always consult a qualified UK accountant or tax adviser for advice specific to your situation.
⚡ UK Crypto Tax in 3 Sentences
HMRC treats crypto as a capital asset — the same rules apply as for shares and property. Every disposal (sale, trade, spend, or gift to a non-spouse) triggers a Capital Gains Tax event. You have a £3,000 annual CGT exempt amount for 2025/26 — gains below this are tax-free.
HMRC Classification: Crypto as Property
HMRC's position, set out in its Cryptoassets Manual (CRYPTO10100), is clear: cryptocurrency is a capital asset for UK tax purposes. It is not currency, not gambling, and not tax-free. Every individual who buys, sells, trades, or earns crypto has potential UK tax obligations.
This means Capital Gains Tax (CGT) applies to profits from disposal, and Income Tax applies to crypto received as earnings, staking rewards, or mining income.
CGT Rates for 2025/26
Following the Autumn 2024 Budget, Capital Gains Tax rates on crypto were aligned with the new higher rates. Crypto gains are taxed at the same rates as other assets (not residential property):
| Taxpayer Type | CGT Rate on Crypto | Threshold |
|---|
| Basic rate taxpayer | 18% | Gains that fall within the basic rate income tax band |
| Higher / additional rate taxpayer | 24% | Gains above the basic rate band |
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How your rate is determined: Add your total taxable income and crypto gains together. The portion that falls within the basic rate band (up to £50,270 for 2025/26) is taxed at 18%. Any excess is taxed at 24%.
The £3,000 Annual CGT Exempt Amount
£3,000
Annual CGT Exempt Amount — Tax Year 2025/26
Gains below this threshold are completely tax-free. This was reduced from £6,000 (2023/24) and £12,300 (2022/23).
The annual exempt amount means your first £3,000 of capital gains each tax year (6 April to 5 April) are completely free from CGT. Only gains above this threshold are taxable.
Married couples and civil partners can use both allowances — £6,000 combined — by holding assets jointly or transferring between spouses (which is not a disposal for CGT purposes). This is a legitimate and widely-used tax planning strategy.
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Bed & ISA strategy: You can't hold crypto directly in a Stocks & Shares ISA. However, some platforms offer crypto ETPs that can be held in ISAs — any gains within an ISA are completely tax-free. Check eligibility with your provider.
Section 104 Pooling Rule
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HMRC requires UK investors to use the Section 104 pooling method for calculating cost basis — you cannot choose FIFO, LIFO, or HIFO as in the US.
How pooling works: all purchases of the same cryptocurrency are combined into a single "pool." The average cost of all units in the pool is your cost basis for each coin. When you sell, you use the average pool cost to calculate your gain.
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Example: You buy 1 BTC for £20,000 and later buy another 1 BTC for £40,000. Your pool now contains 2 BTC at an average cost of £30,000 each. If you sell 1 BTC for £50,000, your gain is £50,000 − £30,000 = £20,000.
The 30-Day "Bed & Breakfasting" Rule
HMRC has an important anti-avoidance rule: if you sell crypto and buy the same coin within 30 days, the purchase is matched against the sale (not the pool). This prevents artificially creating losses by selling and immediately rebuying.
| Matching Order | Description |
|---|
| Same-day rule | Disposals matched with acquisitions on the same day first |
| 30-day rule | Then matched with acquisitions in the following 30 days (chronological order) |
| Section 104 pool | Any remaining matched against the pool average cost |
Income Tax: Staking, Mining & Airdrops
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Not all crypto is subject to CGT — some crypto is treated as income and taxed at income tax rates (20%, 40%, or 45% depending on your tax band):
| Crypto Event | HMRC Treatment | Tax Type |
|---|
| Staking rewards | Income if there is an element of activity/service involved; otherwise CGT at disposal | Income Tax (usually) |
| Mining (individual) | Hobby mining: miscellaneous income. Business mining: trading income + NIC | Income Tax |
| Airdrops (earned) | Income if received in return for a service | Income Tax |
| Airdrops (unsolicited) | No Income Tax at receipt; CGT on disposal | CGT only |
| DeFi interest / lending | Treated as income in most cases | Income Tax |
Filing via Self-Assessment
UK crypto gains must be reported through HMRC Self-Assessment. You must register for Self-Assessment if your crypto gains exceed the £3,000 annual exempt amount, or if your total proceeds from crypto disposals exceed £50,000 in the year.
1
Register for Self-Assessment
If you haven't filed before, register at gov.uk/register-for-self-assessment by 5 October following the end of the tax year in which you had gains.
2
Calculate your Section 104 pool
Use crypto tax software (Koinly is HMRC-compatible) to automatically calculate your pools, match same-day and 30-day transactions, and calculate your total gains and losses.
3
Complete the Capital Gains supplementary pages (SA108)
Enter your total gains, losses, and the annual exempt amount. List all disposal proceeds over £50,000 even if no tax is due.
4
Report any crypto income
Include staking rewards, mining income, and earned airdrops in the income section of your Self-Assessment return (SA100).
5
Submit by 31 January
Online Self-Assessment returns for the tax year ending 5 April are due by 31 January the following year. Pay any tax owed by the same deadline to avoid interest charges.
Calculate UK Crypto Tax with Koinly →
Frequently Asked Questions
Do I need to report crypto if I made a loss?
You don't have to report losses, but it's beneficial to do so. Reported capital losses can be offset against future gains indefinitely. Losses must be formally claimed within 4 years of the end of the tax year in which they occurred.
Is crypto-to-crypto trading taxable in the UK?
Yes. HMRC treats swapping one cryptocurrency for another as a disposal of the first crypto at its sterling value at the time of the exchange. This triggers a CGT calculation even if you never converted to GBP.
Can I transfer crypto to my spouse tax-free?
Yes. Transfers between spouses and civil partners who are living together are not disposals for CGT purposes. The receiving spouse takes on your original cost basis. This is a useful way to use both annual exempt amounts.
What records does HMRC require me to keep?
HMRC requires records of every transaction including: date, type of transaction, number of coins, value in GBP at the time, exchange rates used, and any fees paid. Records should be kept for at least 5 years after the Self-Assessment filing deadline.
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Disclaimer: This guide reflects HMRC rules as understood in March 2026. Tax rules change — consult a qualified UK accountant for personal tax advice.
