Crypto Tax in the UK: What HMRC Actually Expects You to Report
The disposals that trigger Capital Gains Tax, the events that count as income instead, and the record-keeping habit that saves a genuinely stressful January.
By Firoz Khan|16 September 2026|Updated 1 October 2026|7 min read
HMRC's starting position is simple and easy to miss: cryptoassets are treated as property, not currency, for tax purposes. That single classification is what generates almost every rule that follows, and it catches out people who assume crypto only becomes HMRC's business once it's converted back into pounds.
The default rule: crypto is property, not currency
Because crypto is property rather than currency, disposing of it can trigger Capital Gains Tax on any profit, in broadly the same way selling a second property or a share portfolio would. That applies whether the disposal happens by selling for pounds, spending it directly, or swapping it for another cryptoasset.
What counts as a disposal, and what doesn't
Selling for currency, spending it on goods or services, swapping one cryptoasset for another, and giving it to anyone other than a spouse, civil partner or charity all count as disposals for CGT purposes, even when no pounds ever land in a bank account. Moving your own crypto between your own wallets is generally not a disposal. Whether moving tokens from one blockchain to another, for example bridging to a layer 2, is a disposal depends on the facts, according to HMRC. Buying crypto in the first place is not a taxable event either, only disposing of it is.
How the pool works
HMRC does not match each sale to a particular purchase. Each type of token you hold is treated as a single pool with its own pooled allowable cost, which rises when you buy more and falls in proportion when you sell. Two rules take priority. The same-day rule matches a disposal to acquisitions made on the same day, and the 30-day rule matches a disposal to acquisitions made in the following 30 days. Anything left is worked out against the pool.
Say you buy one coin for £1,000 and later another for £3,000. The pool holds two coins with a pooled cost of £4,000, an average of £2,000 each. You then sell one coin for £3,500. The cost against that sale is £2,000, not £1,000 or £3,000, so the gain is £1,500. The pool then holds one coin with a pooled cost of £2,000. The amounts are an example, and the same-day and 30-day rules can change the answer if you also bought around the time of the sale.
Fees and other allowable costs
HMRC's guidance lists allowable costs for Capital Gains Tax that include the original price paid in pounds, transaction fees for inclusion on the distributed ledger, and exchange fees for buying or selling tokens. When you swap one token for another, HMRC's view is that the fee is attributable to both assets, so it counts against the disposal of the first token and towards the cost of the second. Mining costs, and any costs already deducted against Income Tax profits, are not allowable for Capital Gains Tax.
When it's income tax instead of capital gains
Staking rewards, mining rewards, airdrops and DeFi yield are generally treated as miscellaneous or trading income at the point you receive them, taxed at your normal income tax rate on their value at that moment. If you later dispose of that same asset for a different price, a second, separate calculation applies for Capital Gains Tax on whatever it's gained or lost since you received it.
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The detail matters. HMRC's guidance says no Income Tax is due on an airdrop received without doing anything in return, provided it is not part of a trade or business, but an airdrop received in return for a service is taxable income. For staking and mining, unless the activity amounts to a trade, the sterling value of the rewards when you receive them is taxable as miscellaneous income. If you have already paid Income Tax on the value of tokens, you do not pay Capital Gains Tax on that amount. Tokens paid to you by an employer are also subject to Income Tax and National Insurance.
The numbers for 2026/27
The annual CGT exempt amount is £3,000 for 2026/27, well down from the £12,300 exemption of a few years earlier. GOV.UK gives the Capital Gains Tax rates on gains made from 6 April 2026 as 18% on gains within the basic rate Income Tax band and 24% on the rest, and 24% for higher and additional rate taxpayers. Events that trigger Income Tax instead, such as staking, mining and airdrops received for a service, are taxed at your normal Income Tax band.
Why HMRC already has more visibility than people assume
From 1 January 2026, UK crypto service providers must carry out due diligence on their customers and collect information about their transactions under the Cryptoasset Reporting Framework. They then report aggregate transaction data to HMRC, and the first reports are due between 1 January and 31 May 2027, covering 2026. HMRC will also receive information about UK taxpayers from overseas providers through international exchange of information. Treating unreported gains as invisible because they never touched a UK bank account is an increasingly poor assumption.
The record-keeping habit that actually prevents a bad January
Note the date, the GBP value at the time, and the nature of every disposal and every income-triggering event as it happens, not months later. Reconstructing a year of trading activity from memory and scattered exchange statements at Self Assessment deadline is exactly the situation that turns a manageable tax return into a genuinely stressful one.
HMRC's guidance says to keep, for each pool of tokens, the type of token, the date of each disposal, how many tokens you disposed of and have left, their value in pounds and the pooled costs before and after, along with bank statements, wallet addresses and exchange reports. If you report gains on a Self Assessment return, there is a dedicated cryptoasset section on returns for the 2024 to 2025 tax year onwards, and it must be completed in pounds.
Losses, and trading versus investing
A loss on a disposal is deducted from the gains you made in the same tax year. If your gains are still above the tax-free allowance after that, GOV.UK says you may also deduct unused losses from previous tax years. You have to claim a loss by including it on your tax return, and you can do so up to four years after the end of the tax year in which you disposed of the asset. If you have never made a gain and are not registered for Self Assessment, you can write to HMRC instead. Losses on disposals to a spouse or other connected person are restricted.
HMRC says only in exceptional circumstances would it expect an individual to buy and sell tokens with enough frequency, organisation and sophistication that it amounts to a financial trade. Whether it does is a question of fact. If it does, Income Tax takes priority over Capital Gains Tax.
NFTs, DeFi and other cases
HMRC says NFTs are separately identifiable, so they are not pooled and the matching rules do not apply, and each one has its own cost. A policy paper published on 13 July 2026 will change how Capital Gains Tax applies to some crypto lending and liquidity pool arrangements from 6 April 2027, treating certain deposits as no gain, no loss. For anything involving DeFi, lending or unusual tokens, check HMRC's Cryptoassets Manual or take advice.
If you think you have got it wrong
HMRC runs a voluntary disclosure service for unpaid tax on cryptoassets, covering exchange tokens, NFTs and utility tokens. It says the offer you make would usually be the full amount you owe, including tax, interest and any penalties, and that if you do not disclose voluntarily you could face additional interest and penalties. HMRC says people who took reasonable care need only disclose four years back. This article is general information, not tax advice, and the figures apply to 2026/27.
A reminder
The FCA risk warning still applies to higher-risk crypto content. Always assess how much risk you are willing to take before buying.
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