UK Crypto Tax Guide (2026/27)

Capital at risk. Cryptoassets are highly volatile. The Financial Services Compensation Scheme does not cover crypto holdings, and you can lose all of the money you put in. This page explains how UK tax applies to the gains and income you do realise - it is not a recommendation to hold, buy or sell any cryptoasset, and is not regulated financial advice. For decisions about whether crypto is suitable for you, speak to an FCA-authorised financial adviser.

1. UK crypto tax framework

HMRC's position is set out in its Cryptoassets Manual. Tokens are digital and intangible, but they count as a chargeable asset for Capital Gains Tax if they are capable of being owned and have a value that can be realised (CRYPTO22050). That is why exchanging one token for a different token is a disposal even though no sterling changes hands (CRYPTO22100). HMRC expects buying and selling of tokens by an individual to normally be investment activity rather than a trade.

Three charges can apply to crypto activity in a tax year:

• Capital Gains Tax on disposals - selling, swapping, spending, or giving to anyone other than a spouse or civil partner. Charged on gains above the £3,000 annual exempt amount for 2026/27, at 18% within the unused basic rate band and 24% above it.
• Income Tax on tokens received from mining or staking that is not a trade (miscellaneous income, CRYPTO21150 and CRYPTO21200) and on airdrops received for a service (CRYPTO21250). Taxed at your marginal Income Tax rate on the sterling value when received; Scottish taxpayers use the Scottish rates for this income.
• Income Tax plus Class 4 National Insurance where the activity is a trade. Whether it is depends on factors such as degree of activity, organisation, risk and commerciality. Profits go on the self-employment pages of Self Assessment.

Inheritance Tax can also apply. HMRC's view is that an exchange token with no underlying asset is located where its beneficial owner is resident (CRYPTO22600), so a UK resident's tokens are treated as UK assets. See our inheritance tax calculator for the band mechanics.

2. CGT on disposal

Capital Gains Tax is triggered by a disposal. HMRC's CRYPTO22100 lists the cryptoasset disposal events:

• Selling tokens for money, including foreign currency.
• Exchanging tokens for a different type of token (for example BTC for ETH, or ETH for a stablecoin).
• Using tokens to pay for goods or services.
• Giving tokens away to another person - except gifts to your spouse or civil partner. A gift is valued at the sterling value of what you gave away.

Donating tokens to a charity is generally free of Capital Gains Tax, unless the donation is a tainted donation or you dispose of the tokens to the charity for more than your acquisition cost (CRYPTO22100). Moving tokens between addresses you beneficially control is not a disposal, and neither is a mixer that returns the same type of token. Crypto tax software will show these as movements; label them as internal transfers.

Annual exempt amount. Every individual has a £3,000 exempt amount for 2026/27, applied to total gains across all assets. It was £12,300 in 2022-23, £6,000 in 2023-24 and has been £3,000 since 2024-25 (per HMRC rates and allowances). Spouses and civil partners each have their own exempt amount, and transfers between them are on a no gain, no loss basis (TCGA 1992 s.58), so a genuine transfer before a sale can let both exempt amounts be used.

CGT rates for 2026/27.

• 18% on taxable gains that fall within your unused basic rate band.
• 24% on taxable gains above it.

To find the rate, deduct the exempt amount from your gains and add the result to your taxable income. Example: an employee on £40,000 has taxable income of £27,430, leaving £10,270 of the £37,700 basic rate band. A £20,000 gain becomes £17,000 after the exempt amount: £10,270 is taxed at 18% and £6,730 at 24%, a total of £3,464. The gain does not change the Income Tax on the salary. Source: GOV.UK Capital Gains Tax rates. Run your own numbers through our capital gains tax calculator.

Sterling values. Proceeds and costs must be in pounds sterling at the time of each transaction. Use a consistent, reasonable source of exchange rates and keep a note of the method, because HMRC can ask to see your records.

3. Pooling and matching rules

The UK does not let you choose FIFO or specific identification for fungible tokens. HMRC applies the share identification rules in TCGA 1992 ss.104, 105 and 106A to tokens in CRYPTO22200. There are three steps, applied in order:

1. The same-day rule. All acquisitions of a token on one day are treated as a single acquisition and all disposals as a single disposal, and they are matched with each other first.
2. The 30-day rule. If you dispose of tokens and acquire tokens of the same type within the next 30 days, the later acquisition is matched with the earlier disposal (earliest disposal first) instead of going into the pool. This stops a loss being crystallised by selling on 5 April and buying back on 7 April.
3. The section 104 pool. Anything not matched comes out of the pool at the pooled average cost. The pool records the number of tokens and the total allowable cost; each acquisition adds to both, and each disposal removes the tokens sold and a proportionate part of the cost.

One pool per type of token. Someone holding bitcoin, ether and litecoin has three pools, each with its own pooled cost, regardless of how many wallets the tokens sit in. HMRC has not published specific guidance on wrapped tokens; the general rule is that exchanging one type of token for a different type is a disposal, so check the facts of the particular wrapping arrangement.

Stablecoins are not exempt. HMRC lists stablecoins as cryptoassets, so swapping ETH for a stablecoin is a disposal of the ETH at the sterling value of what you receive, even though the stablecoin is pegged to a currency.

Forks. After a hard fork the new tokens go into their own section 104 pool, and the allowable costs of the original pool are split between the two pools on a just and reasonable basis under TCGA 1992 s.52(4). HMRC does not prescribe a particular apportionment method (CRYPTO22300).

4. Worked five-trade example

A single ETH holding across one tax year, starting with an empty pool. Values are illustrative and fees are ignored (in reality fees are allowable costs).

Date	Action	Quantity	GBP value	Pool size after	Pool average
10 May 2026	Buy ETH	2.000	£6,000	2.000	£3,000
15 July 2026	Buy ETH	1.000	£4,500	3.000	£3,500
3 October 2026	Sell ETH	1.500	£7,500	2.000	£3,500
20 October 2026	Buy ETH (within 30 days of the sale)	0.500	£2,000	2.000	matched, not pooled
1 February 2027	Sell ETH	0.800	£4,800	1.200	£3,500

Trade 3 (3 October sale of 1.5 ETH). The 20 October purchase of 0.5 ETH falls within the 30 days after the sale, so 0.5 ETH of the sale is matched with it at its cost of £2,000. Proceeds for that part: £7,500 × 0.5/1.5 = £2,500, a gain of £500. The other 1 ETH comes from the pool at £3,500 each: proceeds £5,000 minus cost £3,500, a gain of £1,500. Total gain on Trade 3: £2,000.

Only the 1 ETH taken from the pool reduces it, leaving 2 ETH with pooled cost £7,000 (still £3,500 each). The 20 October purchase does not enter the pool, because it has been matched with the earlier sale.

Trade 5 (1 February sale of 0.8 ETH). Cost from the pool: 0.8 × £3,500 = £2,800. Proceeds £4,800. Gain £2,000.

Total gains for the year on this token: £2,000 + £2,000 = £4,000. After the £3,000 exempt amount, £1,000 is taxable. If it all falls within the unused basic rate band, the tax at 18% is £180. The 30-day rule changed which cost was used for part of the first sale, which is why spreadsheets that use simple averages often give the wrong answer. Crypto tax software can apply the matching rules across many transactions.

5. Income tax events: staking, mining, airdrops, DeFi

Some crypto receipts are income rather than gains. The HMRC manual sections are CRYPTO21150 (mining), CRYPTO21200 (staking), CRYPTO21250 (airdrops) and CRYPTO61000 onwards (decentralised finance lending and staking).

Staking rewards. If the activity is not a trade, the sterling value of tokens awarded is taxable as miscellaneous income when received, with any appropriate expenses reducing the amount chargeable. Whether it is a trade depends on factors such as degree of activity, organisation, risk and commerciality. If you keep the tokens and later dispose of them, any further gain is a separate CGT calculation, and the amount already taxed as income is not taxed again.

Mining. The same tests apply (CRYPTO21150). Non-trading mining is miscellaneous income at the sterling value of tokens when received, less appropriate expenses. If mining is a trade, profits are charged to Income Tax and Class 4 National Insurance through Self Assessment; equipment may qualify for capital allowances (see our capital allowances calculator). Mining costs such as equipment and electricity are not allowable costs when you later dispose of the tokens (CRYPTO22150).

Airdrops. Income Tax may not apply to airdrops received in a personal capacity without doing anything in return (not related to any service or other conditions), if they are not part of a trade. Airdrops provided in return for, or in expectation of, a service are miscellaneous income or trade receipts (CRYPTO21250). Either way a later disposal can give rise to a chargeable gain, and the tokens go into a section 104 pool (CRYPTO22350).

DeFi lending and liquidity. Under HMRC's current guidance, whether lending or staking tokens through a DeFi platform is a disposal depends on whether you transfer beneficial ownership of the tokens, which needs an examination of the terms (CRYPTO61620). HMRC consulted on a different approach in 2023 and published a summary of responses on 26 November 2025 setting out an approach the government is considering; until any change is legislated, treat each protocol on its own facts and document your reasoning.

6. NFTs specifically

NFTs are cryptoassets, so a disposal can give rise to a chargeable gain in the usual way.

Each NFT is separately identifiable. NFTs are not pooled and no matching rules apply (CRYPTO22200). Each NFT has its own allowable cost, and each disposal is computed against that cost.

Creators. If you create and sell NFTs as a business you are likely to be trading, with profits charged to Income Tax and Class 4 National Insurance through Self Assessment (or Corporation Tax if you trade through a company). Royalties paid to you on later sales are income when received.

Collectors who trade frequently. HMRC expects most individuals' buying and selling to be investment (CRYPTO22050), but the badges of trade - frequency, motive, length of ownership, organisation and financing - decide each case (see BIM20200). A trader pays Income Tax and Class 4 National Insurance on profits instead of CGT at 18% or 24%.

7. The Cryptoasset Reporting Framework from January 2026

The Cryptoasset Reporting Framework (CARF) is an OECD standard for automatic exchange of information, published on 8 June 2023. The UK implemented it through regulations made under section 136 of the Finance Act 2002 and section 349(2) of the Finance (No. 2) Act 2023, which took effect on 1 January 2026 (per HMRC's tax information and impact note).

Who reports. UK reporting cryptoasset service providers (RCASPs) - businesses that let you buy, sell, transfer or exchange cryptoassets. HMRC estimated about 50 providers were in scope. They must register with HMRC.

What you must give them. An individual user must give each provider their full name, date of birth, address and country of residence, and a tax identification number (for UK residents, a National Insurance number or Unique Taxpayer Reference). Giving inaccurate details, or none, to a UK provider can lead to a penalty of up to £300 (per HMRC).

Timeline. Providers collect data from 1 January 2026. The first report, covering 1 January to 31 December 2026, must be submitted between 1 January and 31 May 2027, and then by 31 May each year (per HMRC reporting guidance). HMRC uses data on UK users to link their activity to their tax records. If you live in the UK and use a provider in another country that follows the same rules, that country's tax authority shares your information with HMRC.

What this means for you. HMRC says the data will be used to identify and risk-assess individuals and help them meet their obligations. If you have unreported gains or income from earlier years, disclosing them before HMRC contacts you is treated as unprompted, which attracts lower penalty ranges (see the next section).

8. Voluntary disclosure

HMRC's cryptoasset disclosure service, published in November 2023, is at gov.uk/guidance/tell-hmrc-about-unpaid-tax-on-cryptoassets. It is for unpaid tax from earlier years; income and gains for the current or previous tax year go on your Self Assessment return instead.

How it works. You work out the unpaid Capital Gains Tax and Income Tax, interest and penalty for each year and submit the disclosure. How many years you include depends on why the tax was not paid: 4 years if you took reasonable care, up to 6 years if you did not take care, and up to 20 years if it was deliberate. HMRC sends a payment reference, and you should pay within 30 days of submitting. HMRC then either accepts your offer or contacts you; if it thinks the penalty is too low it may check your affairs further.

Penalty ranges. For inaccuracies, HMRC's factsheet CC/FS7a sets these ranges as a percentage of the extra tax:

• Careless: 0% to 30% unprompted, 15% to 30% prompted.
• Deliberate: 20% to 70% unprompted, 35% to 70% prompted.
• Deliberate and concealed: 30% to 100% unprompted, 50% to 100% prompted.

Penalties for offshore matters can be higher. Where you were never asked to file a return, failure-to-notify penalties apply instead (factsheet CC/FS11). Within each range the penalty is reduced for telling, helping and giving access to records. Contact HMRC if you cannot pay within 30 days.

9. Lost or stolen crypto

Lost keys. HMRC's view in CRYPTO22400 is that misplacing a private key is not a disposal: the key and the tokens still exist. If it can be shown there is no prospect of recovering the key or accessing the tokens, a negligible value claim can be made, treating the tokens as disposed of and reacquired so a loss can be crystallised.

Theft. HMRC does not consider theft to be a disposal, because you still own the stolen asset and have a right to recover it, so victims of theft cannot claim a capital loss (CRYPTO22450). If you paid for tokens and never received them, you may not be able to claim a capital loss either.

Worthless tokens. If tokens you own become worthless or of negligible value, a negligible value claim under TCGA 1992 s.24 treats them as disposed of and immediately reacquired at the value you state (which may be £nil). For pooled tokens the claim must cover the whole pool, and it must state the asset, the amount and the date (CRYPTO22500). The date can be up to two years before the start of the tax year in which you make the claim, if the tokens were already of negligible value then. A claim is not allowed for tokens that were worthless when you acquired them.

Allowable losses are set against gains of the same tax year first; unused losses can be carried forward. A loss must be reported to be used, within 4 years of the end of the tax year of the disposal (per GOV.UK). Keep the evidence; HMRC can ask for it.

10. Record-keeping

HMRC asks you to keep, for each pool and each transaction, the type of token, the date of disposal, the number of tokens disposed of and left, their sterling value, bank statements and the pooled costs before and after the disposal. Wallet addresses are also worth keeping. Exchange reports are not tax calculations and do not track pooled costs (per GOV.UK). A practical record for each transaction includes:

• Date and time of each transaction.
• Type of transaction: buy, sell, swap, transfer, staking reward, mining reward, airdrop, gift, fork.
• Quantity and token (with the contract address for less common tokens).
• Sterling value at the time, from a consistent source.
• Counterparty (exchange, wallet address or protocol).
• Transaction fee in tokens and in sterling.
• Transaction hash for on-chain transactions.

How long to keep them. Under the Taxes Management Act 1970 s.12B, if you file your return on time you should keep records for at least 22 months after the end of the tax year (for 2026/27, to at least the end of January 2029). If your crypto activity is a trade, keep records for at least 5 years after the 31 January filing deadline (for 2026/27, 31 January 2033). See GOV.UK record keeping.

Fees. Transaction fees for having a transaction included on the ledger are allowable costs (CRYPTO22150). For non-trading staking or mining income, appropriate expenses reduce the amount chargeable to Income Tax (CRYPTO21200, CRYPTO21150); equipment can qualify for capital allowances only if the activity is a trade.

11. Self Assessment reporting

Capital gains. Returns for 2024 to 2025 onwards include a cryptoasset section, completed in pounds sterling. You must report gains if any of these apply:

• Your total taxable gains are above the £3,000 exempt amount.
• You are registered for Self Assessment and the total amount you sold assets for was more than £50,000 (the rule from 2023 to 2024 onwards, which replaced 4 times the allowance).
• You have a capital loss you want to claim.

Keep your calculations; HMRC can ask to see them. If you are eligible and do not file a return, the real time Capital Gains Tax service lets you report by 31 December after the tax year.

Crypto income that is not a trade (staking, mining, airdrops received for a service) is declared on the main return as other income. Where the activity is a trade, use the self-employment pages: the short pages (SA103S) if turnover is below the VAT registration threshold, otherwise the full pages. See our Self Assessment step-by-step walkthrough.

Deadlines for the 2026/27 return (tax year ending 5 April 2027):

• 5 October 2027 - register for Self Assessment if it is your first year.
• 31 October 2027 - paper return deadline.
• 31 January 2028 - online return, and payment of the tax due including any Capital Gains Tax.
• 31 July 2028 - second payment on account, if payments on account apply.

Payments on account do not include Capital Gains Tax. They are advance payments of Income Tax (and Class 4 National Insurance) under TMA 1970 s.59A. Capital Gains Tax for 2026/27 is paid in one amount by 31 January 2028 under s.59B. Crypto income taxed through Self Assessment, such as staking income, can trigger payments on account for the next year.

Related guides and tools

• Capital Gains Tax calculator - model the 18% and 24% rates against your unused basic rate band.
• Self Assessment step by step - the walkthrough for the main return and supplementary pages.
• Tax deadlines 2026/27 - every SA, PAYE and CGT deadline for the current year.
• HMRC penalties guide - the failure-to-notify and late-filing penalty regimes.
• How UK tax works (primer) - the broader UK tax framework that the crypto rules slot into.
• Dividend tax calculator - if you also hold shares alongside crypto.
• Inheritance Tax calculator - for crypto held at death.
• Marriage Allowance calculator - a separate allowance transfer between spouses.
• SalaryTax methodology - how we cite, source and update.
• Data sources index - retrieval dates on every figure.