UK Cryptocurrency Tax Guide 2026/27
HMRC has clear rules on taxing cryptocurrency. Whether you're trading Bitcoin, holding Ethereum, or minting NFTs, you need to understand your tax obligations.
How HMRC Classifies Crypto
HMRC treats cryptocurrency as property, not currency. This means:
- Capital Gains Tax applies when you dispose of crypto
- Income Tax applies to crypto received as payment or from mining/staking
- Crypto-to-crypto trades are taxable disposals
Taxable Events
Triggers CGT
- Selling crypto for fiat (GBP, USD, etc.)
- Exchanging crypto for another crypto
- Spending crypto on goods/services
- Gifting crypto (except to spouse)
Triggers Income Tax
- Mining cryptocurrency
- Staking rewards
- Airdrops (if received for a service)
- Payment for work in crypto
- DeFi income (lending rewards)
Not Taxable
- Buying crypto with fiat
- Holding crypto
- Transferring between your own wallets
- Gifting to spouse/civil partner
- Donating to charity
Capital Gains Tax on Crypto
CGT Rates 2026/27
| Tax Band | CGT Rate |
|---|---|
| Basic rate | 10% |
| Higher rate | 20% |
Annual Exempt Amount
The first £3,000 of gains are tax-free.
Calculating Gains
Gain = Proceeds - Allowable Costs
Allowable costs include:
- Original purchase price
- Transaction/gas fees
- Exchange fees
Share Pooling Rules
HMRC uses "share pooling" for crypto of the same type:
- Same-day rule: Match with same-day acquisitions first
- 30-day rule: Match with acquisitions in next 30 days
- Section 104 pool: Average cost of remaining holdings
Income Tax on Crypto
Mining Income
Crypto mining is treated as:
- Hobby: Taxed as miscellaneous income when sold
- Trade: Taxed as self-employment income
The distinction depends on scale, organisation, and profit motive.
Staking Rewards
Staking rewards are generally taxed as:
- Income at receipt (market value when received)
- CGT when later sold (gain from income value to sale value)
Payment in Crypto
If paid in crypto for work:
- Income Tax and NI due at GBP value when received
- CGT applies on subsequent disposal
Reporting Crypto to HMRC
Under £3,000 Gains
No reporting required if total gains are below the annual exempt amount.
Over £3,000 Gains
Report via Self Assessment:
- Capital gains summary page
- Specify as cryptocurrency
Over £50,000 Gains
Complete the full capital gains pages with detailed calculations.
Record Keeping
Keep detailed records for at least 5 years:
- Date of each transaction
- Type of crypto
- Quantity
- GBP value at time
- Exchange/wallet used
- Transaction fees
- Running pool calculations
Consider crypto tax software like Koinly, CoinTracker, or Recap.
DeFi and Advanced Topics
Liquidity Pools
- Adding liquidity: Potential disposal
- Receiving LP tokens: Acquisition
- Rewards: Income
Yield Farming
- Generally treated as income
- Complex record-keeping required
NFTs
- Creating and selling: Potentially trading income
- Buying and selling: CGT
- Royalties: Income
Airdrops
- Unexpected airdrops: Potentially not income until sold
- Airdrops for services: Income at receipt
Frequently Asked Questions
Do I need to report if I haven't cashed out?
If you've made crypto-to-crypto trades exceeding £3,000 in gains, yes. A swap from Bitcoin to Ethereum is a taxable disposal.
What if I lost money on crypto?
Capital losses can be offset against gains. Unused losses carry forward indefinitely.
How do I value crypto for tax?
Use the GBP market value at the time of transaction. Keep evidence from a reputable exchange.
What about crypto held on exchanges that collapsed?
You may be able to claim a negligible value claim if the crypto is irrecoverable, allowing you to crystallise the loss.
Related Calculators
- Capital Gains Tax Calculator - Calculate CGT
- Crypto Tax Calculator - Crypto-specific calculations
- Income Tax Calculator - For mining/staking income