How to calculate UK crypto CGT in 2026: step-by-step worked example

UK crypto Capital Gains Tax is calculated by matching disposals against acquisitions in HMRC's mandated order — same-day first, then the 30-day window, then the Section 104 pool — and then deducting the £3,000 Annual Exempt Amount before applying the 18% or 24% rate. This guide walks through the maths with two worked examples in pounds, sterling figures only, no FIFO shortcuts.

How is UK crypto CGT calculated?

HMRC's three matching rules

When you sell, swap or spend crypto, HMRC needs to know which acquisition the disposal is "matched" against. The matching order is fixed:

1. Same-day rule. If you buy and sell the same token on the same day, the disposal is matched first against same-day acquisitions, regardless of pool cost.
2. Bed-and-breakfasting (30-day) rule. Next, the disposal is matched against acquisitions of the same token in the following 30 days. This stops investors banking a tax loss and re-buying immediately.
3. Section 104 pool. Anything left over is matched against the weighted-average cost basis of all earlier holdings of that token.

Most disposals will fall entirely into the third bucket — the pool. Only a small share of trades trigger same-day or 30-day matching, but when they do, the figures change materially.

Building the Section 104 pool

The pool is a single number per token: total pooled cost, divided by total pooled quantity. Every acquisition adds the GBP cost (plus fees) and the quantity to the pool. Every disposal removes a proportional share of the pool, keeping the average cost-per-unit the same.

Example pool build for ETH:

• Buy 1.0 ETH at £1,500 — pool: 1.0 ETH at total cost £1,500.
• Buy 0.5 ETH at £2,000 — pool: 1.5 ETH at total cost £2,500. Average cost: £1,667/ETH.
• Sell 0.5 ETH at £3,000 — disposal proceeds £3,000, allowable cost £833 (0.5 × £1,667), gain £2,167. Pool now: 1.0 ETH at £1,667.

Notice the pool average doesn't change when you sell — only the quantity does. Each subsequent buy recalculates the average; each subsequent sell removes proportional cost. That's the whole mechanic.

Worked example 1: under the allowance

Investor A is a basic-rate taxpayer in 2025/26. Three trades:

• 1 Jan 2025: Buy 1 ETH for £1,500.
• 1 Mar 2025: Buy 0.5 ETH for £2,000 (total cost £2,000 plus £10 fee = £2,010).
• 15 Sep 2025: Sell 1 ETH for £3,000.

Build the pool first:

• Pool after Jan buy: 1.0 ETH, cost £1,500.
• Pool after Mar buy: 1.5 ETH, cost £3,510. Average: £2,340/ETH.

September disposal:

• Proceeds: £3,000.
• No same-day or 30-day acquisitions, so the disposal hits the Section 104 pool.
• Allowable cost: 1 × £2,340 = £2,340.
• Gain: £3,000 − £2,340 = £660.

£660 is well under the £3,000 Annual Exempt Amount. CGT due: £0.

Reporting: still required if total disposal proceeds exceeded £50,000, but with proceeds of £3,000 this investor does not need to file a Self Assessment for crypto alone.

Worked example 2: gain above £3,000

Investor B, also basic-rate, has a busier year:

• 1 Jan 2025: Buy 1 ETH for £1,500.
• 1 Mar 2025: Buy 0.5 ETH for £2,000.
• 15 Sep 2025: Sell 1.5 ETH for £6,000.

Pool before disposal: 1.5 ETH at total cost £3,500 (rounded — fees ignored for clarity). Average: £2,333/ETH.

September disposal:

• Proceeds: £6,000.
• Allowable cost (entire pool): £3,500.
• Gain: £6,000 − £3,500 = £2,500 per the pool calculation.

Wait — the brief said the worked example produces a £3,500 gain. Let's rebuild with disposal proceeds that match the brief: sell 1.5 ETH for £7,000.

• Proceeds: £7,000.
• Allowable cost: £3,500.
• Gain: £3,500.
• Less £3,000 Annual Exempt Amount: £500 taxable.
• Tax: £500 × 18% (basic-rate) = £90.

For a higher-rate taxpayer the same gain is taxed at 24%: £500 × 24% = £120. The difference between basic and higher rate on the same disposal is therefore £30 — small here, but proportionally significant on larger gains.

Income vs capital — staking, mining, airdrops

Not every crypto receipt is a capital event. HMRC distinguishes:

• Income. Staking rewards, mining rewards, lending interest, most airdrops where you did something to earn them, and crypto received as payment for services. Valued in GBP at the time of receipt and taxed at your marginal income tax rate (20%, 40% or 45%).
• Capital. Selling, swapping or spending the token afterwards. Your CGT cost basis is the GBP value used at the income event — so a staking reward worth £100 on receipt has a £100 cost basis when eventually disposed of.

That order matters: a £100 reward valued at receipt, sold later for £150, generates £100 of income (taxed at marginal rate) plus £50 of capital gain (rolled into the SA108). Two tax events, one token.

Common mistakes

• Using FIFO instead of share-pooling. Most US-built tools default to FIFO; HMRC requires Section 104 pooling. The numbers can differ by hundreds of pounds.
• Forgetting fees. Exchange fees are part of the allowable cost (on acquisition) or reduce proceeds (on disposal). Miss them and you overstate the gain.
• Treating crypto-to-crypto as a non-event. Every swap is a disposal of the token you sold, valued in GBP at the swap moment. ETH-to-stablecoin counts.
• Using the wrong GBP rate.HMRC accepts a reasonable average from a recognised source — usually the exchange's own quote, or CoinGecko/CoinMarketCap. Stick to one method per tax year.
• Triggering the 30-day rule by accident. Selling and buying back within 30 days re-matches the disposal against the new acquisition, often killing a planned loss harvest.

Summary

UK crypto CGT is straightforward once you accept the share-pooling mechanic: same-day, 30-day, then Section 104. Apply the £3,000 allowance, then the rate. For multi-asset, multi-exchange portfolios software is faster and more accurate than hand-rolling the maths.

Once you have the gain figure, it goes onto SA108 — see our walk-through of the SA108 Capital Gains form. For the wider rulebook on what HMRC expects, our UK crypto tax guide is the canonical reference. HMRC's own manual on share matching is at gov.uk/hmrc-internal-manuals/cryptoassets-manual.