UK Cryptocurrency Tax 2026/27: CGT, Staking, Airdrops and DeFi

Q Is cryptocurrency taxed in the UK?

Yes. HMRC does not treat cryptoassets as currency or money (CRYPTO61110 refers to this), so the ordinary rules apply. Selling, swapping, spending or giving away tokens is a disposal for Capital Gains Tax (CRYPTO22100), charged in 2026/27 at 18% within the basic rate band and 24% above it, after the £3,000 annual exempt amount. Tokens received from mining, staking or some airdrops can be income instead (CRYPTO21150, CRYPTO21200, CRYPTO21250). Buying and holding is not a disposal, and nor is moving tokens between wallets you own.

Q How is CGT calculated on crypto disposals?

Each type of token has its own section 104 pool at average cost. Disposals are matched first with tokens bought the same day, then with tokens bought in the following 30 days, and only then with the pool (TCGA 1992 ss.104, 105 and 106A, CRYPTO22200). Allowable costs include the purchase price and transaction fees (CRYPTO22150). Worked example: a pool of 1.0 BTC cost £35,000. Selling 0.5 BTC for £25,000 uses £17,500 of cost, a gain of £7,500. After the £3,000 exempt amount, £4,500 is taxable: £1,080 if it all falls above the basic rate band at 24%.

Q What about mining and staking income?

If the activity is not a trade, the sterling value of tokens when you receive them is miscellaneous income, less any appropriate expenses; whether it is a trade depends on the degree of activity, organisation, risk and commerciality (CRYPTO21150, CRYPTO21200). Worked example: 5 ETH of staking rewards received when ETH is worth £2,500 is £12,500 of income, or £5,000 of Income Tax if it all falls in the 40% band. The £1,000 trading allowance covers income from self-employment, casual services and hiring out personal equipment (gov.uk), so check that guidance before assuming it covers token rewards.

Q How are airdrops taxed?

HMRC says Income Tax may not apply to airdropped tokens received without doing anything in return and not as part of a crypto trade. Airdrops received in return for, or in expectation of, a service are income, either miscellaneous income or trade receipts (CRYPTO21250). Either way, disposing of the tokens later can give a chargeable gain, and airdropped tokens go into their own section 104 pool unless you already hold that token (CRYPTO22350).

Q How is DeFi yield taxed?

HMRC does not consider the return on a DeFi loan to be interest for tax purposes, because it does not treat cryptoassets as money (CRYPTO61110). Whether lending or adding liquidity is itself a disposal depends on whether you transfer beneficial ownership of the tokens, which turns on the platform terms; exchanging tokens for a liquidity token is treated as a disposal of one token for another (CRYPTO61620). Read the terms of each protocol and keep records of every movement.

Q What records must I keep?

For each pool, keep a separate record of every transaction (gov.uk cryptoasset guidance). Exchange reports help but do not replace your own records. Under TMA 1970 s.12B, records must be kept until the first anniversary of the 31 January filing date, or the fifth anniversary if you carry on a business, and for longer if a return was late or HMRC has opened a check (gov.uk record keeping).

Q When do I have to report crypto on Self Assessment?

You report and pay when your taxable gains are above the £3,000 allowance. If you are registered for Self Assessment, you also report gains when total disposal proceeds exceed £50,000, even if the gain is below the allowance (gov.uk, from 2023 to 2024 onwards). Returns from 2024 to 2025 onwards have a cryptoasset section in the capital gains pages. Losses must be claimed within 4 years of the end of the tax year of the disposal. Income from mining or staking goes in the self-employment or other-income pages depending on whether it is a trade.

Q What is CARF and does HMRC see my exchange data?

The Cryptoasset Reporting Framework took effect on 1 January 2026. UK reporting cryptoasset service providers must collect information on in-scope transactions and on their users, including tax residency, and send it to HMRC annually; information on non-UK users is exchanged with other jurisdictions that have implemented CARF (HMRC tax information and impact note). If you have undeclared gains or income, HMRC's Digital Disclosure Service is the route to correct past years.

Q Can I claim crypto losses and carry them forward?

Yes. Losses are deducted from gains in the same tax year first. If the total is still above the allowance, unused losses from earlier years can be deducted, but only down to the allowance, and the rest carries forward (gov.uk). Worked example: a £15,000 gain and a £8,000 loss in the same year net to £7,000; after the £3,000 allowance, £4,000 is taxable. If tokens you still hold become worthless you can make a negligible value claim for the whole pool (TCGA 1992 s.24, CRYPTO22500). Theft is not a disposal, so victims of theft cannot claim a loss (CRYPTO22450); a lost private key is not a disposal either, though a negligible value claim may be possible if there is no prospect of recovery (CRYPTO22400).

Q How are NFTs taxed?

NFTs are separately identifiable, so they are not pooled and the matching rules do not apply: each NFT has its own cost (CRYPTO22200). Selling or swapping an NFT is a disposal, and allowable costs follow the same section 38 rules as other tokens, including transaction fees for recording the transaction on the ledger (CRYPTO22150).

Q Can I hold crypto in an ISA or pension?

Tokens themselves are not on HMRC's list of ISA qualifying investments. UK cryptoasset exchange traded notes (cETNs), debt securities whose return tracks a cryptoasset, are: from 6 April 2026 no new cETNs can go into a stocks and shares ISA (those held before that date can stay), and they can instead be held in an Innovative Finance ISA where the manager offers them (HMRC guidance for ISA managers). The ISA allowance is £20,000 for 2026/27. A cETN is not the token itself, and losses inside an ISA cannot be set against gains outside it.