Crypto Tax in the UK: A Beginner’s Guide

Crypto tax in the UK comes down to two taxes. Capital Gains Tax (CGT) applies when you dispose of crypto, for example by selling or swapping it. Income Tax applies when crypto reaches you as pay or as a reward. This guide explains both for UK-resident individuals, using HMRC’s rules as of September 2026.

It is the UK companion to our general primer, Crypto Taxes: What to Know Before You Buy. For the identity rules around crypto, see KYC and crypto. In the US? Read Crypto Tax in the US: A Beginner’s Guide.

Important: This is general information, not tax, legal or financial advice. Your tax depends on your circumstances, and different rules can apply if dealing in crypto is your business. Check HMRC’s guidance or ask a qualified tax adviser before you act.

Is buying crypto taxable in the UK?

No. Buying crypto with pounds is not taxable on its own, and neither is holding it. Moving coins between crypto wallets you own is not a disposal either, because you keep ownership the whole time.

The day you buy still matters. What you paid, plus allowable fees, becomes the cost you subtract when you later work out a gain.

When does Capital Gains Tax apply to crypto?

Capital Gains Tax applies when you dispose of crypto. It taxes the profit you make, and HMRC counts these as disposals:

• Selling it for pounds or another currency.
• Swapping it for a different crypto, such as bitcoin for ether.
• Using it to pay for goods or services.
• Giving it away. Gifts to your spouse, civil partner or a charity are treated differently.

Swaps catch many beginners out. No pounds reach your bank, but you still need the value in pounds of the crypto you gave up, at the time of the swap.

When does Income Tax apply instead?

Income Tax applies when crypto reaches you as pay or as a reward. The main cases are:

• Pay from an employer: crypto you receive from employment counts as income. When it can easily be turned into cash, as bitcoin can, your employer must pay the Income Tax and National Insurance through PAYE.
• Mining, staking and lending: unless you are running a trade, tokens from crypto mining, proof-of-stake staking or lending are taxable income, valued in pounds when you receive them.
• Airdrops: Income Tax applies if you got the airdrop in return for a service, or in expectation of one. If you did nothing to receive it, Income Tax may not apply.

Small amounts may be covered by the £1,000 trading and miscellaneous income allowance, which applies each tax year. If your total miscellaneous income from all sources is between £1,000 and £2,500, you must tell HMRC. Above £2,500, you must register for Self Assessment.

If you later sell or swap tokens you received as income, CGT can apply to any rise in their value since you received them.

Which tax usually applies to common crypto actions?

Disposals usually mean Capital Gains Tax, and crypto received as pay or a reward usually means Income Tax.

How much Capital Gains Tax will I pay on crypto?

You pay CGT only on your total taxable gains above the annual allowance, at 18% or 24%. Your gain on each disposal is what you received in pounds, minus what the crypto cost you and any other allowable costs.

Allowable costs include most exchange fees for buying and selling, and the network fees paid to get a transaction onto the blockchain. Add up your gains for the tax year, subtract any losses, then subtract the annual exempt amount. As of September 2026:

• Annual exempt amount: £3,000 for 2025/26 and £3,000 for 2026/27.
• CGT rates: for both tax years, add your taxable gains to your taxable income. The part that fits within your basic rate band is taxed at 18%, and the rest at 24%.

A simple, made-up example: you buy crypto for £1,000, including fees. Later you sell it all for £4,500 and pay £30 in fees. Your gain is £4,500 minus £30 minus £1,000, which is £3,470. After the £3,000 allowance, £470 is taxable. If it all falls within your basic rate band, the tax is 18% of £470, or £84.60.

What are the same-day, 30-day and section 104 rules?

They decide which purchase each sale is matched with, because you cannot pick which coins you sell. HMRC applies them in this order:

1. Same-day rule: first, with tokens of the same type that you bought on the same day.
2. 30-day rule: next, with tokens of the same type that you bought in the 30 days after the sale. So selling and buying back within 30 days does not reset your cost.
3. Section 104 pool: anything left is matched with a pool of all your other tokens of that type, at their average cost.

HMRC’s example: you buy 100 tokens at £2 each (£200), then 300 at £1 each (£300). Your pool now holds 400 tokens costing £500, or £1.25 each. If you sell 200, their cost for your tax calculation is £250.

Each type of token has its own pool, so bitcoin, ether and litecoin make three pools. NFTs are not pooled, because each one is unique. If you trade often, crypto tax software or an accountant can do the matching.

What records should I keep for HMRC?

Keep a record of every crypto transaction yourself. HMRC says this is your job, because crypto exchanges may keep records only for a short time, or may no longer exist when you file. For each transaction, note:

• the type of token and the date
• whether you bought or sold, and how many tokens
• the value in pounds at the time
• how many tokens you hold afterwards, and your pooled cost before and after each disposal
• supporting documents, such as bank statements, wallet addresses and exchange or wallet downloads

A spreadsheet is fine. Download your transaction history regularly, not only at tax time. If you send your Self Assessment return on time, keep your records for at least 22 months after the end of the tax year it covers.

How do I report crypto gains to HMRC?

You report gains on a Self Assessment tax return or, if you are a UK resident, through HMRC’s real-time Capital Gains Tax service. The UK tax year runs from 6 April to 5 April.

• Self Assessment: the capital gains summary pages (SA108) have their own section for cryptoassets. If you are registered for Self Assessment and your total sale proceeds for the year were more than £50,000, you must report your gains even if they are under the allowance.
• Real-time Capital Gains Tax service: as of September 2026, it covers gains made in 2025/26 and 2026/27. You report by 31 December after the tax year ends and pay by 31 January. If you are already registered for Self Assessment, you also include the gains on your tax return.

For the 2025/26 tax year, file online and pay any tax you owe by 31 January 2027 (paper returns are due by 31 October 2026). If you need to file and are new to Self Assessment, tell HMRC by 5 October 2026.

What is CARF, and why might a crypto provider ask for my tax details?

CARF, the Cryptoasset Reporting Framework, is an international set of rules under which crypto service providers report their users’ details and transactions to tax authorities. Since 1 January 2026, crypto exchanges and other cryptoasset service providers under the UK rules must collect details such as your full name, address, country of tax residence and tax identification number.

Their first reports cover 1 January to 31 December 2026 and are due between 1 January and 31 May 2027. They include users who are tax resident in the UK. So a provider may ask for these details on top of its usual identity verification. HMRC says not giving them may lead to a penalty, and the provider may refuse to serve you further.

Can I claim a loss on crypto?

Yes. If you sell or swap crypto for less than it cost you, you make a capital loss. You can claim it up to 4 years after the end of the tax year in which you disposed of the crypto. A claimed loss is deducted from your gains in the same tax year, and any loss left over can be carried forward.

Losing access is different. If you lose your private keys, that is not a disposal. But if there is no prospect of recovering the key or the tokens, you may be able to make a negligible value claim, which can let you record a loss.

Coinmama Team

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