On 27 August 2026 HMRC published its first official statistics on taxable crypto gains, a first look at who actually pays crypto tax in the UK. In the 2024-25 tax year, 17,600 people reported disposals of crypto liable to Capital Gains Tax: £1.38 billion of taxable gains on £13.8 billion of sales, an average gain of £78,000. Of those, 240 reported more than £1 million each, £717 million between them, according to HMRC’s press release. Those are the people who filed. HMRC also estimates that its compliance and education work brought in an extra £168 million of Capital Gains Tax that year.
Most holders will never see numbers like those, but the rules reach small portfolios too. The tax-free allowance for gains is now only £3,000 a year, and a handful of swaps between tokens can use it up without a single pound reaching your bank account. Everything below is the law and guidance in force as of 25 October 2026.
If you came here from our lesson on crypto taxes in the United States, the logic will feel familiar: tokens are treated as property, not money. The general principles common to most countries are in our introduction to how crypto is taxed. Nothing here is personal tax advice; for a complicated situation, a chartered tax adviser or HMRC itself is the right next step.
Crypto tax in the UK starts from one idea: tokens are property
HMRC does not have a special “crypto tax”. It applies the existing taxes to a new kind of asset, and it explains how in its Cryptoassets Manual, the internal guidance its own staff use, which anyone can read online. The manual was last updated on 28 November 2025 and has separate chapters for individuals, businesses, DeFi and compliance.
For an individual, the starting point is in the chapter on which taxes apply. Most people buy tokens as a personal investment, so HMRC expects them to pay Capital Gains Tax (CGT) when they dispose of those tokens. Income Tax, and sometimes National Insurance, comes into play in narrower cases: when you are paid in tokens by an employer, or when you receive them from blockchain and earns a reward, which makes rewriting history very expensive.">mining, staking, some airdrops or lending.
Could you be a trader instead, taxed on profits as income? In theory yes, in practice rarely. HMRC’s manual says that “only in exceptional circumstances” would it expect an individual to buy and sell exchange tokens often enough to be running a financial trade (CRYPTO20250). It is a question of fact, judged by analogy with share-trading case law. Frequent buying and selling from a phone app is, for HMRC, usually still investment.
What counts as a disposal, and what does not
CGT is due on a gain when you dispose of a token. On its main guidance page for individuals, last updated on 5 October 2026, HMRC lists four ways of disposing of crypto.
Selling, swapping, spending and giving away
Selling tokens for pounds or any other ordinary currency is the obvious one. The second surprises many beginners: exchanging one cryptoasset for another type is a disposal too. If you swap ether for solana, or bitcoin for a stablecoin, HMRC treats it as if you had sold the first token at its market value in pounds and bought the second. You owe tax on the gain even though no sterling ever reached your bank account.
Paying for goods or services with crypto is the third. Buying a laptop with bitcoin counts as disposing of the bitcoin at the value of the laptop. The fourth is giving tokens away. A gift to a friend or a child is treated as a disposal at market value, so the giver can owe tax on a gift that brought in nothing.
There is one exception for gifts, and HMRC’s guidance names it directly: giving tokens away is a disposal “unless it’s a gift to your spouse, civil partner or charity”. Spouses and charities are covered further down.
Transfers between your own wallets are not taxed
Moving tokens from an exchange to your own hardware wallet, or between two addresses you control, is not a disposal: you keep the beneficial ownership, which is the test HMRC applies in CRYPTO22100. The same page says that sending tokens through a mixer and getting the same kind of token back is not a disposal either, while putting in one token and receiving a different one is. Simply buying and holding is never taxed, however much the price rises.
Two unhappy cases are worth knowing. Losing your private key is not a disposal, says HMRC: the tokens still exist and still belong to you. If there is no prospect of ever recovering the key, you can make a negligible value claim (explained in the section on losses). Theft is treated differently. HMRC’s view is that a victim still owns the stolen tokens and may try to recover them, so theft is neither a disposal nor a loss you can claim. Paying for tokens that never arrive may not give a capital loss either. Our guide on how to avoid crypto scams explains how those losses usually happen.
CGT rates for crypto and the £3,000 allowance
Once you know your disposals for the tax year, which runs from 6 April to 5 April, you add up the gains, subtract any losses, and subtract the annual exempt amount. That allowance fell from £12,300 to £3,000 in two steps, and the rates went up in the middle of the 2024-25 year, on 30 October 2024.
| Tax year | Annual exempt amount | CGT rates on crypto for individuals |
|---|---|---|
| 2022-23 | £12,300 | 10% and 20% |
| 2023-24 | £6,000 | 10% and 20% |
| 2024-25 | £3,000 | 10% and 20% until 29 October 2024; 18% and 24% from 30 October 2024 |
| 2025-26 | £3,000 | 18% and 24% |
| 2026-27 | £3,000 | 18% and 24% |
Source: HMRC, Capital Gains Tax rates and allowances, page updated on 13 April 2026.
Which rate you pay depends on your income. Gains that fit inside your unused basic-rate Income Tax band are taxed at 18%; the part above it is taxed at 24%. Higher and additional rate taxpayers pay 24% on all their taxable gains. If your gains fall into both bands, HMRC lets you set the £3,000 allowance against the part taxed at the higher rate, according to the gov.uk rates page.
A simple example with invented figures. You bought one token for £10,000 and sell it in the 2026-27 tax year for £14,000. The gain is £4,000. After the £3,000 allowance, £1,000 is taxable. If that £1,000 sits inside your basic-rate band, you owe £180; if you are a higher rate taxpayer, you owe £240.
These are the rates in force as of 25 October 2026. The Budget is due on Wednesday 28 October 2026: the Chancellor of the Exchequer, John Healey, confirmed the date on 31 July 2026 in a video message published by HM Treasury, calling it his first Budget as Chancellor. Rates and allowances can change at a Budget, so check the gov.uk pages after that date before you rely on the figures above.
One threshold catches people who made no gain at all. If you are registered for Self Assessment, HMRC asks you to report your disposals when the total you sold for in the tax year was more than £50,000, even if your taxable gains are below the allowance. That rule applies from 2023-24 onwards. Someone who traded £60,000 of tokens back and forth for a small profit still has something to declare.
Calculating the gain: pools, the 30-day rule and allowable costs
A gain is what you received for the tokens (in pounds) minus what they cost you, minus allowable costs. The difficulty with crypto is that people buy the same token many times at different prices. The UK answers that with share pooling, the same method used for shares. We worked through it step by step, with numbers, in our guide to calculating crypto capital gains; here is only the UK frame.
Each type of token goes into its own smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">pool, called a section 104 pool, with one average cost. Two matching rules come first, as HMRC’s pooling page, CRYPTO22200, describes. Under the same-day rule, tokens of one type bought and sold on the same day are matched together. Under the 30-day rule, if you sell and then buy back the same token within 30 days, the sale is matched with the later purchase rather than with the pool. In practice, selling a token and buying it straight back does not reset its cost or create a loss on paper. NFTs are different: each one is unique, so they are not pooled at all.
Every amount must be in pounds sterling. For a token-to-token swap there is no pound price on the transaction, so you have to choose an appropriate exchange rate. HMRC’s valuation page (CRYPTO23000) does not name a required source: it asks you to take reasonable care, use the same method throughout and keep a record of how you did it.
Allowable costs reduce the gain. HMRC accepts transaction fees, the cost of advertising for a buyer or seller, of drawing up a contract and of a valuation needed to work out the gain. It does not accept the cost of mining equipment or electricity, nor any cost you already deducted for Income Tax. Fees for depositing or withdrawing sterling are not allowable either, because sterling is not an asset for CGT.
HMRC also expects records for each pool: the type of token, the date of each disposal, the number of tokens disposed of and left, the value in pounds, bank statements, and the pooled cost before and after each disposal. The yearly statement from an exchange is not a tax calculation. It knows nothing of tokens you hold elsewhere or of the 30-day rule.
When crypto is income: wages, mining, staking and airdrops
Some tokens are taxed when you receive them, as income, before any later CGT on their sale. The two taxes do not overlap: an amount already charged to Income Tax is not charged again as a gain, under section 37 of the Taxation of Chargeable Gains Act 1992.
Paid in crypto by an employer
Tokens received as pay are earnings. HMRC’s manual (CRYPTO21100) says they are subject to Income Tax and National Insurance, and that exchange tokens usually count as readily convertible assets, so the employer accounts for the tax to HMRC through PAYE. When you later sell the tokens, any rise in value since you received them can be a capital gain.
Mining and staking rewards
For mining, HMRC first asks whether the activity is a trade, looking at how organised, risky and commercial it is. A large, organised operation is a trade and its tokens are trading receipts. A hobby miner instead declares the sterling value of the tokens on the day received as miscellaneous income, minus appropriate expenses. Staking rewards follow the same logic in CRYPTO21200: usually miscellaneous income at their sterling value when you receive them, and a possible capital gain when you dispose of them later.
Losses on miscellaneous income cannot be set against your salary: they can only be carried forward against future miscellaneous income. A £1,000 trading allowance exists for small amounts of trading income, and HMRC’s DeFi chapter (CRYPTO61213) says that in some cases “the trading and miscellaneous income allowance may apply”. Whether it covers your rewards depends on your situation; the conditions are on HMRC’s page on trading allowances.
Airdrops
An airdrop that lands in your wallet without you doing anything in return, and not as part of a trade, may escape Income Tax: HMRC’s airdrop page, CRYPTO21250, says Income Tax “will not always apply” to airdropped tokens received in a personal capacity. If you received the tokens in return for a service, or in expectation of one (promoting a project, completing tasks), they are income. Either way, the airdropped tokens go into their own pool, or into the existing pool if you already hold that token, and selling them later can bring CGT.
Income Tax rates that apply to crypto income in 2026-27
Income from crypto is added to your other income and taxed at your usual rates. For England, Wales and Northern Ireland in 2026-27, these are the bands on gov.uk. Scottish taxpayers have different bands, listed on the same page.
| Band (2026-27) | Taxable income | Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
The personal allowance shrinks by £1 for every £2 of income above £100,000. A higher rate taxpayer who earns staking rewards worth £2,000 can therefore pay 40% Income Tax on them, then 24% CGT on any later gain above the allowance.
DeFi lending and liquidity pools: today’s rules and the April 2027 proposal
DeFi is where UK rules are least comfortable for users today. Under HMRC’s current guidance (CRYPTO61620), lending tokens to a platform, or depositing them in a liquidity pool, can itself be a disposal if you pass beneficial ownership to someone else. A strong sign that ownership has passed is that the borrower or protocol can deal freely with your tokens. Depositing one token and receiving a different one in return, such as a receipt token, is treated as an exchange at market value. The interest or rewards are taxed separately, usually as miscellaneous income, while the return of your original tokens is capital.
The result can be a CGT bill when you deposit tokens, before you have made any real profit. The government has proposed a change. A policy paper published on 13 July 2026 describes a “no gain, no loss” treatment for certain loans and liquidity-pool deposits, so that tax would be deferred until a real economic disposal. It would apply to individuals and trustees from 6 April 2027 and, by HMRC’s estimate, concern about 700,000 people.
The paper covers three situations. Lending a single type of token and getting the same type back would be neither a gain nor a loss. A borrower would be treated as acquiring the borrowed tokens at market value when borrowing, and as disposing of them at that same value when handing back tokens of the same type, with any collateral ignored. In an automated market maker pool, putting tokens in and taking the same types out would be no gain, no loss as long as you get back the same quantity; if you get back more or fewer tokens, a gain or loss arises on the difference.
That treatment is a proposal, not law. It comes after a call for evidence in 2022, a consultation in 2023 and a summary of responses published at Budget 2025, and it still has to be enacted by Parliament. Until then, today’s rules apply, and the paper says nothing about staking.
A second draft published the same day concerns stablecoins. Under the draft legislation on the tax treatment of stablecoins, gains made by individuals and trustees on disposals of “eligible” stablecoins (widely available tokens backed to hold a stable value against sterling or another currency and designed for payments) would not be chargeable gains from 6 April 2027, and certain lending returns on them would be taxed as interest. The draft also treats anyone holding such coins just before that date as selling and buying them back at market value, with the gain or loss arising on 6 April 2027. Like the DeFi measure, it is a draft: until it becomes law, swapping a token for a stablecoin is a disposal like any other.
Losses, spouses and the legal ways to reduce the bill
When tokens are sold for less than they cost, the loss is useful, but only once HMRC knows about it. You must report a capital loss within four years after the end of the tax year in which it happened, according to the gov.uk losses page. A reported loss is set first against gains of the same year, and any unused part is carried forward to later years. You claim it in your Self Assessment return; if you have never made a gain and are not registered for Self Assessment, you can write to HMRC instead. A loss on a gift or sale to a family member or another connected person can only be set against gains on disposals to that same person.
Tokens that become almost worthless while you still hold them, after a project collapses for example, can be the subject of a negligible value claim. The claim treats you as having sold and bought back the tokens at the value you state, which can be nil, so the loss is crystallised. Because of pooling, the claim covers the whole pool of that token. It is not available for tokens that were already worthless when you bought them.
Spouses and civil partners who live together can transfer tokens to each other at “no gain, no loss”: the receiving partner takes over the original cost, and no tax is due on the transfer (HMRC’s Capital Gains Manual, CG22000). Each partner has their own £3,000 allowance and their own Income Tax band. Gifts to a charity generally do not give rise to CGT either.
The other lawful choices are about timing: the tax year ends on 5 April, so a disposal on 5 April and one on 6 April fall in different years with different allowances. The 30-day rule limits what you can do by selling and buying back. These are the rules, not a strategy: whether any of them suits you depends on your whole tax position.
How to report crypto on your Self Assessment return
You need to report if your taxable gains are above the allowance, if your sales total more than £50,000 while you are in Self Assessment, if you received crypto income (staking, mining, airdrops for a service), or if you received tokens from an employer that were not taxed through PAYE.
Since the 2024-25 return, Self Assessment has a dedicated cryptoasset section, added to HMRC’s guidance on 29 May 2025, where gains are entered in pounds sterling. Crypto income goes in the existing Income Tax parts of the return. HMRC also offers a Capital Gains Tax real time service to report and pay a gain soon after the disposal, without waiting for the return.
For the 2025-26 tax year (6 April 2025 to 5 April 2026), the deadlines are:
- New taxpayers had to register for Self Assessment by 5 October 2026.
- A paper return is due by 31 October 2026.
- An online return, and payment of the tax owed, is due by 31 January 2027.
Missing a deadline brings penalties and interest.
How HMRC knows about your crypto: CARF and nudge letters
The idea that crypto is invisible to the tax office is out of date. From 1 January 2026, every UK cryptoasset service provider must collect identifying information on its users under the international Cryptoasset Reporting Framework (CARF), drawn up by the OECD. You give each provider, including those based outside the UK, your full name, date of birth, address, country of tax residence and a tax identifier, which for UK residents is your National Insurance number or Unique Taxpayer Reference, as HMRC’s guidance for users sets out. A user who gives no details, or wrong ones, to a UK provider can face a penalty of up to £300.
The providers then report. The first reporting period covers the calendar year 2026, and providers must send that data to HMRC between 1 January and 31 May 2027, then by 31 May every year, according to HMRC’s guidance for providers, updated on 3 June 2026. Providers that fail to report, report late or report wrongly face penalties of up to £300 per user. The framework is built for tax offices to swap this data, and UK providers report users resident in any other country that applies it, so accounts held across borders are covered too. This is why exchanges ask for so much during sign-up; our guide to how centralised exchanges work explains their KYC checks.
HMRC already uses what it has. ICAEW, the accountants’ body, reported on 23 July 2026 that HMRC’s Wealthy and Mid-sized Business Compliance team would contact individuals it believes may have underpaid tax on crypto between July 2026 and March 2027, by letter, email or text message. A letter of this kind is not an investigation, and no action is needed if you have nothing to report. If you do, the usual route is to amend the return: you generally have 12 months after the filing deadline, so until 31 January 2027 for the 2024-25 return. After that, the disclosure service below applies.
The cost of waiting is spelled out by HMRC: if it finds unpaid tax you should have declared, the penalty can reach 100% of the tax due, plus interest, and more for offshore matters.
If you have gains or income from past years that you never declared, HMRC’s Cryptoasset Disclosure Service lets you notify it, disclose online and then pay within 30 days of the disclosure. How far back you must go depends on why the tax was missed: 4 years if you took reasonable care, up to 6 years for carelessness, up to 20 years if it was deliberate. Interest runs daily on the unpaid tax.
Living abroad, moving to the UK, or an American in Britain
UK tax follows residence, decided by the statutory residence test. In short, spending 183 days or more in the UK in a tax year makes you resident; there are automatic overseas tests (fewer than 16 days in the UK if you were resident in one of the three previous years, fewer than 46 days if you were not), and otherwise the automatic UK tests (such as having your only home in the UK) and then your ties to the UK decide. People who are not resident do not pay UK CGT on their crypto gains, although their own country usually taxes them.
Leaving for a short time does not wipe the slate. Under the temporary non-residence rule in HMRC’s guidance on the statutory residence test, gains made while abroad can be taxed in the year you come back if you were away for five years or less and had been resident for at least four of the seven tax years before leaving.
Americans living in the UK carry two systems. The US taxes its citizens on worldwide income wherever they live, so a US citizen in London still reports crypto disposals to the IRS in dollars, under the rules described in our lesson on US crypto taxes, while also following the UK rules in pounds. The two tax years do not even match: the US uses the calendar year, the UK runs from 6 April.
UK residents with ties to France or Italy can compare with our guides to crypto taxes in France and crypto taxes in Italy. Tax treaties decide which country has the first right to tax when both claim it, and the answer depends on your residence: check the treaty before assuming either way.
Dates to watch: the Budget, 31 January and 31 May 2027
On 28 October 2026 the Budget may change rates or allowances; the gov.uk pages linked above will be updated afterwards. On 31 January 2027 the online return and the tax for 2025-26 are due, and so is any amendment to a 2024-25 return. By 31 May 2027 HMRC will hold the first full year of CARF data from UK providers. And 6 April 2027 is the start date proposed for the DeFi “no gain, no loss” rules and the stablecoin exemption, if Parliament adopts them.
The next lesson in this path moves to another European country’s rules. Whatever the Budget brings, the records HMRC asks for stay the same: the sterling value of every swap, sale and reward on the day it happened, and the pooled cost of each token.
