Cryptocurrency
Crypto Tax UK Cryptocurrency Tax Explained
Understand how HMRC taxes cryptocurrency, including Bitcoin and other cryptoassets. Learn when Capital Gains Tax or Income Tax applies, current crypto tax rates, HMRC pooling rules and how to report crypto on your Self Assessment tax return.
In brief: UK investors can potentially pay Capital Gains Tax when they sell, swap, spend or give away crypto. Simply holding cryptocurrency that has increased in value does not normally trigger CGT.
Crypto tax in the UK can apply when you sell, swap, spend or give away cryptocurrency, and when you receive crypto from activities such as staking, mining or employment. The tax you pay depends on what you did with the crypto, how you acquired it and whether HMRC treats the return as a capital gain or income.
When Do You Pay Tax on Crypto in the UK?
Cryptocurrency is not automatically tax-free simply because it is digital. HMRC looks at what has happened to the cryptoasset and the nature of the transaction.
For most individual investors, a tax calculation becomes relevant when cryptocurrency is disposed of. Importantly, a disposal does not only mean selling Bitcoin or another token and withdrawing pounds into a bank account.
| Crypto activity | Normally taxable? | Typical UK tax treatment |
|---|---|---|
| Buying crypto with GBP | No immediate tax | Acquisition cost normally forms part of the CGT calculation later |
| Holding crypto | No | An increase in value alone does not normally trigger CGT |
| Selling crypto for GBP | Yes, potentially | Capital Gains Tax |
| Swapping Bitcoin for Ethereum or another token | Yes, potentially | Capital Gains Tax disposal of the token given up |
| Using crypto to buy goods or services | Yes, potentially | Capital Gains Tax |
| Giving crypto to another person | Usually | Potential CGT disposal, generally using market value |
| Transfer to spouse or civil partner | Special rules apply | Generally no immediate CGT charge where qualifying conditions are met |
| Moving crypto between your own wallets | Normally no | No disposal if beneficial ownership remains unchanged |
| Mining rewards | Potentially | Income Tax may apply on receipt; CGT may apply on later disposal |
| Staking rewards | Potentially | Income Tax may apply on receipt; CGT may apply on later disposal |
| Airdrops | Depends | Income Tax and/or CGT depending on the circumstances |
How Does Capital Gains Tax on Crypto Work?
HMRC normally treats cryptoassets held by individuals as investments unless the individual's activity is sufficiently exceptional to amount to a financial trade. For most private investors, gains are therefore dealt with under the Capital Gains Tax rules.
Broadly, a crypto gain starts with the value received when you dispose of the asset, less the allowable cost attributed to the crypto disposed of and certain allowable transaction costs.
Example: selling cryptocurrency for a profit
Suppose an investor has crypto with an allowable cost of £10,000 and sells it for £25,000.
Ignoring other allowable costs and HMRC's matching rules for illustration:
£25,000 proceeds − £10,000 cost = £15,000 capital gain.
If this were the investor's only capital gain in 2026/27, the £3,000 annual exempt amount could potentially reduce the taxable gain to £12,000. The CGT rate applying to that taxable amount would then depend on the investor's taxable income and available basic-rate band.
Crypto Tax Rates UK – 2026/27
There is no separate UK “cryptocurrency tax rate”. Where an individual investor's crypto profit is a capital gain, the normal Capital Gains Tax rates apply.
| 2026/27 | Amount / rate | How it applies |
|---|---|---|
| Individual CGT annual exempt amount | £3,000 | Applies to total qualifying capital gains, not separately to each cryptocurrency |
| Lower individual CGT rate | 18% | Applies to taxable gains falling within the available basic-rate band |
| Higher individual CGT rate | 24% | Applies to taxable gains falling above the basic-rate band |
Your salary or other income therefore matters when calculating crypto tax. A basic-rate taxpayer can have part of a taxable gain charged at 18% and another part charged at 24% if the gain takes them above the available basic-rate band.
Is Swapping Crypto Taxable?
Yes, a crypto-to-crypto exchange can be a taxable disposal. You do not need to convert cryptocurrency into pounds before Capital Gains Tax becomes relevant.
For example, exchanging Bitcoin for Ethereum normally means you have disposed of the Bitcoin. The sterling market value of what you receive is relevant when calculating the disposal proceeds and any resulting gain or loss.
HMRC Crypto Pooling Rules: Section 104, Same-Day and 30-Day Rules
One of the most important—and frequently overlooked—parts of UK crypto tax is determining which acquisition cost should be matched against a disposal.
For fungible cryptoassets such as Bitcoin or Ether, you generally cannot simply choose the particular coins that produced the most favourable tax result. HMRC applies statutory asset identification rules.
Each type of fungible token normally has its own pool. Bitcoin and Ether, for example, would not share one combined cost pool.
These rules are why simply subtracting the cost of “the Bitcoin I sold” from the sale proceeds can produce the wrong tax result.
When Is Crypto Subject to Income Tax?
Not every crypto transaction is dealt with under Capital Gains Tax. Cryptocurrency received as a reward or in return for an activity can potentially constitute taxable income.
Crypto mining
Mining rewards can be subject to Income Tax. The precise treatment depends on the circumstances and whether the activity amounts to a trade.
Staking rewards
Staking rewards can create taxable income based on the nature of the reward and activity. A later disposal of the tokens can also create a capital gain or loss.
Airdrops
Whether an airdrop is taxable as income depends on why it was received. A subsequent disposal can still fall within Capital Gains Tax.
Payment in cryptocurrency
Crypto received from an employer or in exchange for work or services can be taxable as income rather than simply being treated as an investment gain.
A single token can therefore potentially encounter two different taxes: Income Tax when it is received and Capital Gains Tax when it is later sold, swapped, spent or otherwise disposed of.
Do You Pay Tax on Crypto if You Do Not Cash Out?
Potentially, yes. This is one of the most important principles of UK crypto tax.
You may have a taxable disposal even if you never withdraw money to your bank account. For example, exchanging one cryptocurrency for another can crystallise a gain on the asset you give up.
Conversely, simply holding cryptocurrency that has increased in value does not normally create Capital Gains Tax until a disposal takes place.
Are Crypto Transfers Between Your Own Wallets Taxable?
A genuine transfer of the same cryptocurrency between wallets or accounts that you beneficially own is generally not itself a disposal, because beneficial ownership has not changed.
Accurate records are nevertheless important. Exchange exports can make transfers appear to be withdrawals or disposals unless the corresponding receiving wallet can be identified.
Crypto Gifts and Tax
Giving cryptocurrency away can normally be a disposal for Capital Gains Tax purposes. Where the recipient is not your spouse or civil partner, market-value rules can become relevant even though you received no money.
Transfers between spouses or civil partners who meet the relevant conditions are generally treated differently and can normally take place without an immediate CGT charge.
The recipient effectively inherits the appropriate tax cost under the spouse/civil-partner rules, so the tax has not necessarily disappeared—it can affect the calculation when the crypto is eventually disposed of.
Can Crypto Losses Reduce Your Tax?
Crypto investing does not always produce gains. A correctly calculated capital loss may be available to offset taxable capital gains, subject to the normal CGT rules.
This means that maintaining records of unsuccessful investments can be just as important as keeping records of profitable trades.
What Crypto Records Should You Keep for HMRC?
Crypto tax calculations can become difficult because transactions may be spread across several exchanges, wallets and blockchains. Records should be maintained in pounds sterling even where the transaction itself took place entirely in crypto.
Useful records include:
- Date and time of each transaction
- Type and quantity of cryptoasset
- Whether the transaction was a purchase, sale, swap, transfer, gift or reward
- GBP market value at the relevant time
- Purchase and disposal values
- Exchange and transaction fees
- Exchange statements and CSV transaction histories
- Wallet addresses
- Evidence identifying transfers between your own wallets
- Records of staking, mining and airdrop rewards
- Previous Section 104 pool calculations
Do not assume that an exchange will retain every historic record you may eventually need. Downloading transaction histories regularly can make a future tax calculation considerably easier.
HMRC, Crypto Exchanges and CARF From 2026
Crypto tax transparency is increasing. The Cryptoasset Reporting Framework (CARF) introduced new due-diligence and reporting requirements for relevant cryptoasset service providers from 1 January 2026.
Relevant UK providers are required to collect information about users and report qualifying user and transaction information to HMRC under the framework.
The practical message for UK crypto investors is straightforward: do not assume that activity on a crypto platform is invisible to HMRC. Your own tax records and Self Assessment disclosures should be complete and capable of being reconciled to your underlying transactions.
How Do You Report Crypto Tax to HMRC?
Crypto gains and taxable crypto income may need to be included on your Self Assessment tax return. The correct section depends on whether the amount is a capital gain, employment income, trading income or another form of taxable income.
Common UK Crypto Tax Mistakes
Only reporting cash withdrawals
Crypto-to-crypto swaps and spending crypto can also constitute disposals. Tax does not depend solely on money reaching your bank.
Ignoring Section 104 pooling
Using the cost of whichever coins you believe you sold can produce an incorrect gain where HMRC's statutory matching rules apply.
Treating wallet transfers as sales
Moving crypto between wallets you beneficially own is normally not a disposal, but your records need to demonstrate what happened.
Ignoring rewards
Staking, mining and some airdrops can have Income Tax consequences before any later Capital Gains Tax calculation.
Forgetting losses
Properly established capital losses can potentially reduce taxable capital gains, so loss-making transactions should also be recorded.
Relying only on exchange summaries
A single exchange cannot necessarily see transactions carried out on other exchanges, wallets or decentralised platforms.
Do I Need an Accountant for Crypto Tax?
A small number of straightforward transactions may be relatively simple to calculate. The position becomes more complicated where there are hundreds or thousands of transactions, several wallets or exchanges, crypto-to-crypto trades, staking, mining, DeFi activity, missing records or transactions spanning several tax years.
Crypto tax software can be valuable for organising transaction data, but software still depends on complete information and correct classification. Transfers incorrectly classified as disposals, missing wallet history or unusual transactions can materially change the result.
An accountant can help review the tax treatment, reconcile the resulting calculations and ensure the relevant figures are included in the correct parts of the tax return.
Crypto Tax UK FAQs
Do you pay tax on crypto in the UK?
Potentially. Capital Gains Tax can apply when an individual sells, swaps, spends or gives away cryptocurrency. Income Tax can apply to crypto received from activities such as employment, mining, staking or certain airdrops, depending on the circumstances.
How much crypto profit is tax-free in the UK?
For 2026/27, an individual generally has a £3,000 Capital Gains Tax annual exempt amount. This applies to qualifying capital gains across your assets; it is not a separate £3,000 allowance for cryptocurrency.
What is the UK crypto Capital Gains Tax rate?
For 2026/27, the main individual Capital Gains Tax rates are 18% and 24%. The rate depends on your taxable income and how much of the taxable gain falls within your available basic-rate band.
Is selling Bitcoin taxable in the UK?
Selling Bitcoin is a disposal for Capital Gains Tax purposes. Whether tax is actually payable depends on the gain, your total gains and losses, available annual exempt amount and your wider tax position.
Is swapping crypto for another crypto taxable?
Yes, potentially. Exchanging one type of cryptoasset for another is normally treated as a disposal of the asset you give up, even though no pounds sterling are received.
Do I pay crypto tax if I have not withdrawn to my bank?
You can. UK Capital Gains Tax is based on disposals rather than bank withdrawals. A crypto-to-crypto exchange, spending crypto or making certain gifts can create a disposal without any cash entering your bank account.
Is transferring crypto between my own wallets taxable?
Normally not, provided you remain the beneficial owner throughout. Good records should be retained to show that the transaction was a transfer rather than a disposal.
Is staking crypto taxable in the UK?
Staking rewards can be taxable as income depending on the nature of the arrangement. When the rewarded tokens are later disposed of, Capital Gains Tax may also need to be considered.
Does HMRC know about cryptocurrency?
Crypto should not be regarded as anonymous for UK tax purposes. HMRC has information-gathering powers, and from 2026 the Cryptoasset Reporting Framework places additional information collection and reporting requirements on relevant cryptoasset service providers.
Can crypto losses reduce my tax bill?
Properly calculated and claimed capital losses may be available to offset capital gains under the normal Capital Gains Tax rules. Accurate transaction records are essential.
Do I need to declare crypto on Self Assessment?
You may need to report crypto gains or income where the relevant reporting requirements are met. The appropriate part of the tax return depends on whether the amount is a capital gain or taxable income.
Need Help With Your Crypto Tax Return?
Crypto tax becomes complicated quickly when transactions span several exchanges, wallets and tax years. The Online Accountants can help with your UK Self Assessment and the tax treatment of cryptocurrency transactions.
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