Crypto Tax UK 2026: complete HMRC Self Assessment guide

UK crypto investors pay Capital Gains Tax at 18% or 24% on disposals above the £3,000 Annual Exempt Amount in the 2025-26 tax year, and Income Tax at 20%, 40% or 45% on staking, mining and airdrop rewards. The Self Assessment deadline is 31 January 2027. This guide walks through every step HMRC expects, with worked examples in pounds.

Is crypto taxed in the UK in 2026?

HMRC published its consolidated Cryptoassets Manual in 2021 and has updated it several times since. The Autumn Budget 2024 raised CGT rates for non-residential disposals from 10/20% to 18/24% with effect from 30 October 2024, and the £3,000 Annual Exempt Amount carries forward into 2025-26 and 2026-27. Whether you trade on Binance, hold a Ledger wallet, or earn yield through DeFi, the same framework applies.

For a wider primer on the reporting workflow, see our companion piece on how to report crypto on taxes, which covers the same logic at a higher level.

Two ideas matter most before you read on. First, HMRC does not care that crypto feels like a separate world; the same statutes that govern shares, property and unit trusts govern your wallet. Second, almost everything taxable happens at the point of disposal, meaning the moment you part with beneficial ownership. Once you have those two anchors, the rest of UK crypto tax is mechanics: matching disposals to acquisitions, converting to pounds, and putting the totals on the right Self Assessment line.

Residency matters too. This guide assumes you are UK tax resident under the Statutory Residence Test. Non-residents and recent arrivers (including those under the new Foreign Income and Gains regime that replaced the old non-dom rules from 6 April 2025) face a different set of considerations and should seek tailored advice.

When do you owe crypto tax?

The single most common mistake UK investors make is assuming tax only applies when crypto is converted to pounds. HMRC's position is broader. A taxable disposal occurs whenever beneficial ownership of a cryptoasset passes from you to someone (or something) else.

The five disposal events that trigger Capital Gains Tax are:

1. Selling crypto for fiat. Selling BTC, ETH or any token for GBP, EUR, USD or another fiat currency is a disposal at the GBP value received.
2. Swapping one crypto for another. Trading 1 BTC for 15 ETH is a disposal of the BTC at its GBP market value at the moment of the trade. The same value becomes the acquisition cost of the new ETH.
3. Spending crypto on goods or services. Buying a coffee with Bitcoin is a disposal at the GBP value of the coffee.
4. Gifting crypto. Gifts to anyone other than your spouse or civil partner are disposals at market value, regardless of whether money changes hands.
5. Donating to non-charities. Donations to qualifying UK charities are generally exempt, but transfers to other recipients are disposals.

Income Tax events are separate and run alongside CGT:

• Mining rewards (treated as miscellaneous income, or trading income if at scale)
• Staking rewards (miscellaneous income at the GBP value when received)
• Airdrops earned for services or activity (miscellaneous income)
• Salary or freelance fees paid in crypto (employment or self-employment income)
• Lending and yield farming returns where ownership did not transfer to a third party

Two grey areas trip people up most. The first is borrowing against crypto. Taking a loan against your BTC on a centralised platform is generally not a disposal because you keep beneficial ownership; the lender holds the asset as security. The second is wrapping tokens. Wrapping ETH to wETH on Ethereum, or BTC to wBTC, involves transferring the original to a custodian (or a contract) in exchange for a new token. HMRC has indicated in its DeFi guidance that wrapping can be a disposal where ownership transfers, although many practitioners argue otherwise for one-to-one wrappers. The conservative position is to treat it as a disposal and recognise the gain or loss in pounds.

How to calculate cost basis (share-pooling)

UK CGT uses share-pooling (also called the Section 104 rule). Identical tokens of the same kind are pooled into a single average-cost holding. Every acquisition adds tokens and pounds to the pool. Every disposal removes tokens at the pool's current average cost per unit.

Three matching rules apply, in this order, when you dispose of tokens:

1. Same-day rule. Disposals are first matched against any acquisitions of the same token made on the same day.
2. Bed-and-breakfasting rule (30 days). Next, disposals are matched against acquisitions made in the following 30 days. This blocks the old strategy of selling at a loss and immediately buying back to crystallise the loss while keeping the position.
3. Section 104 pool. Anything left over comes from the share pool at the weighted average cost.

Worked example. Imagine you bought 1 BTC for £20,000 in March 2023 and another 1 BTC for £40,000 in November 2024. Your pool now holds 2 BTC at a total cost of £60,000, giving an average of £30,000 per BTC. In June 2025 you sell 0.5 BTC for £25,000. The cost basis withdrawn from the pool is 0.5 × £30,000 = £15,000. Your gain is £25,000 minus £15,000 = £10,000. The pool now holds 1.5 BTC at a remaining cost of £45,000.

Same-day example. On 12 July 2025 you buy 0.2 BTC for £8,000 in the morning and sell 0.2 BTC for £8,400 in the afternoon. Same-day matching applies: cost basis £8,000, gain £400, regardless of any earlier pool position.

30-day example. On 1 September 2025 you sell 1 ETH for £2,500 (currently showing a loss versus your pool). On 20 September 2025 you buy 1 ETH for £2,400. The 30-day rule kicks in: the September sale is matched against the September repurchase, cost basis £2,400, gain £100. The pool is unaffected.

Allowable costs include more than the headline purchase price. You can add exchange fees on acquisition, transaction fees on disposal, professional valuation fees and (in principle) reasonable software costs used to calculate the gain. You cannot deduct general portfolio management subscriptions, hardware wallet purchases (these are capital items for personal use) or interest on borrowing used to fund speculation.

Keep contemporaneous records. HMRC's expectation is that you can produce, for every disposal, the date and time, the type and quantity of cryptoasset, the GBP value, the cumulative pool position before and after, the counterparty (or wallet address), and any fees. Good crypto tax software keeps an audit trail; if you organise records yourself, keep them in a structured spreadsheet plus the original CSV exports.

How to report on Self Assessment

Crypto is reported through the Self Assessment system. You will need a Government Gateway account and a Unique Taxpayer Reference (UTR). If you have not filed before, register at gov.uk by 5 October following the end of the tax year.

The relevant forms are:

• SA100, the main Self Assessment return. Income from staking, mining, airdrops or crypto wages goes here, usually under "Other UK income".
• SA108, the Capital Gains supplementary pages. All crypto disposals are reported here. From the 2024-25 tax year HMRC has a dedicated "Other property, assets and gains" subsection that explicitly covers cryptoassets.
• SA106, the Foreign pages, if you held crypto on a non-UK platform and received foreign income (for example, interest paid by an offshore lender).
• SA101, Additional Information, occasionally relevant for unusual income types.

The reporting workflow looks like this:

1. Pull a complete transaction history from every exchange, wallet and protocol you used during the tax year (6 April to 5 April).
2. Convert every transaction to GBP using the spot rate at the time. HMRC accepts any consistent, justifiable method, but the daily rate from a reputable index (CoinGecko, CoinMarketCap, exchange close) is standard.
3. Apply the share-pooling, same-day and 30-day matching rules to compute cost basis on each disposal.
4. Sum proceeds, allowable costs and gains across the year for each token category.
5. Enter aggregated totals on SA108, including total proceeds, total allowable costs, total gains and total losses, plus the number of disposals.
6. Report income from staking, mining and airdrops on SA100 at the GBP value on the day of receipt.
7. Pay any tax due by 31 January, alongside the first payment on account if applicable.

The reporting threshold for SA108 is twofold. You must report if your total proceeds exceed four times the Annual Exempt Amount (so £12,000 in 2025-26), even if your gains are below the £3,000 allowance. You must also report if your gains exceed £3,000. Most active crypto investors clear both thresholds easily.

Payments on account are easy to overlook. If your total Self Assessment liability for 2025-26 exceeds £1,000 and at least 80% of the liability is not collected at source, HMRC requires two payments on account toward the following year, due 31 January and 31 July. A large crypto-driven CGT bill in one year can drive payments on account into the next, even if your gains were a one-off.

2026 rates and allowances

The figures below apply to the 2025-26 tax year, which is the year you are filing for in January 2027. CGT rates were rebased by the Autumn Budget 2024 and have not changed since.

The official HMRC tax on cryptoassets manual and the wider Capital Gains Tax rates page are kept up to date and worth bookmarking.

DeFi, staking and NFTs

HMRC's position on decentralised finance has evolved since the original DeFi guidance of February 2022 and the consultation responses published in 2024. The principle is unchanged: tax treatment depends on whether beneficial ownership of the underlying tokens transfers when you interact with a protocol.

Staking. Rewards from proof-of-stake validators or delegated staking are miscellaneous income at the GBP value on the day they vest. That value is also the cost basis for CGT when you later dispose. If you sell the same day for the same price, the CGT gain is zero, but the income tax still applies.

Liquidity provision. Depositing tokens into a liquidity pool typically transfers ownership to the pool contract and you receive LP tokens in return. HMRC usually treats this as a disposal of the deposited tokens and an acquisition of the LP tokens. Withdrawal is the reverse: a disposal of the LP tokens and acquisition of the underlying assets.

Lending. Lending tokens through a protocol that returns the same tokens without transferring ownership (a cToken or similar wrapped position) may not be a disposal at the point of deposit. The interest you receive is income.

Airdrops. If you did nothing to receive an airdrop and it was a passive windfall, no income tax arises. If you provided a service (a quest, social media post or prior interaction with the protocol), the airdrop is miscellaneous income.

NFTs. HMRC treats each NFT as its own asset, not part of a pool. Buy cost is the GBP price at acquisition. The disposal proceeds are the GBP value at sale. The gain is taxable at 18% or 24%. NFT royalties paid to creators are usually trading income, not capital.

Reporting losses

Losses are valuable, and many UK crypto investors leave them unclaimed. The rules are straightforward but require active reporting.

Allowable losses are first set against gains in the same tax year, automatically. If your net position is still a loss, the remainder can be carried forward indefinitely against future gains, but only if you formally claim them on Self Assessment. The deadline to claim a loss is four years from the end of the tax year in which it arose, so a loss from 2025-26 must be claimed by 5 April 2030.

Negligible value claims apply when a token still technically exists but has become worthless (an obvious example is a rug-pulled token that still trades at zero on a dead DEX). You can make a negligible value claim to crystallise the loss without an actual disposal. Once accepted, you are treated as if you had sold and immediately reacquired the token at the negligible value.

Total losses (where private keys are gone forever) are tricky. HMRC says losing a key is not a disposal because beneficial ownership has not changed. To realise the loss you usually need a negligible value claim, supported by evidence that recovery is impossible.

For more on optimising loss claims, see our deep dive on crypto losses and tax.

Worked loss example. In 2025-26 you realise £8,000 of gains on Bitcoin and £5,500 of losses on a basket of altcoins. The losses are first set against the gains in-year, leaving a net gain of £2,500. That net gain is below the £3,000 Annual Exempt Amount, so no CGT is payable, but the proceeds threshold may still mean you need to file SA108 to record the activity. If instead the loss had been £15,000 against £8,000 of gains, your in-year position would be a £7,000 net loss, claimed on SA108 and carried forward to offset future gains.

Spousal transfers are a useful planning tool for losses and gains alike. Transfers between spouses or civil partners living together happen at no gain no loss, meaning your partner inherits your cost basis. A couple has two Annual Exempt Amounts (£6,000 combined) and can split disposals to optimise band utilisation, all without triggering tax on the transfer itself.

Common pitfalls

Software that does the maths

Manual share-pooling across hundreds of trades on five exchanges and three wallets is possible, but painful. Crypto tax software automates the matching rules, applies daily GBP conversions, and produces an HMRC-ready capital gains summary you can paste straight into SA108.

Koinlyis the platform we recommend most for UK investors. It implements share-pooling, same-day and 30-day rules natively, supports almost every exchange and chain, and exports a download labelled "HMRC capital gains summary". The free tier handles transaction syncing, with paid tiers unlocking the report from around £39.

Coinpanda is a strong cheaper alternative that also handles UK rules correctly and tends to have better DeFi coverage for some chains. The free plan includes 25 transactions, useful for small portfolios.

CoinLedgeris excellent for US users but requires manual mapping for UK share-pooling, since the platform's defaults are FIFO and Specific Identification. We do not recommend it as a first choice for UK filers.

Whatever you choose, run the numbers well before the January deadline. Reconciling missing transactions, broken API connections and pre-DeFi history takes longer than anyone expects.

A practical timeline that works for most UK investors: pull and reconcile all data in September or October, draft your SA108 totals in November, and sit on the figures for a few weeks to spot anomalies before submitting in early January. Leaving everything to the last week of January 2027 is the surest way to file with errors, miss the deadline and pay an automatic £100 late filing penalty plus interest on any underpaid tax.

Finally, treat HMRC's nudge letter campaign as a useful prompt rather than a threat. Voluntary disclosure carries far lower penalties than discovery, and if you have unreported crypto gains from earlier years the Worldwide Disclosure Facility or the digital disclosure service is the path back to compliance. Combined with the international rollout of CARF reporting from 2026 onward, the practical reality is that exchange-held history is going to reach HMRC eventually. Filing accurately, on time, every year is by far the simplest strategy.