Crypto tax in the UK: how HMRC taxes your crypto in 2026/27

HMRC doesn’t treat crypto as money. For most individuals, cryptoassets are something you invest in, so the main tax to think about is Capital Gains Tax when you get rid of them. Crypto you receive, from an employer or from mining or staking, is usually income instead.

This guide covers individuals who buy, hold and sell crypto as an investment in the 2026/27 tax year (6 April 2026 to 5 April 2027). If you trade so often and in such a business-like way that it amounts to a trade, different rules apply, and that is a question for an adviser.

When you pay Capital Gains Tax on crypto

HMRC says you may need to pay Capital Gains Tax when you dispose of cryptoassets. A disposal includes:

• Selling them for pounds or another currency.
• Exchanging them for a different cryptoasset. Swapping bitcoin for ether is a disposal of the bitcoin, even though no pounds change hands.
• Using them to pay for goods or services.
• Giving them away to another person, unless it’s a gift to your spouse, civil partner or a charity.

Buying crypto with pounds and holding it is not a disposal. You only start a tax calculation when one of the events above happens.

Rates and the tax-free allowance for 2026/27

You only pay Capital Gains Tax if your total gains for the tax year, from crypto and any other assets, are above the tax-free allowance (the Annual Exempt Amount).

	2026/27
Tax-free allowance (individuals)	£3,000
Rate on gains within your unused basic-rate band	18%
Rate on gains above the basic-rate band	24%
Rate for higher and additional rate taxpayers	24%

Your gains are added on top of your taxable income. Whatever part of the gain still fits in your basic-rate band is taxed at 18%; the rest is taxed at 24%.

Example. Priya is a higher-rate taxpayer. Her only disposal this tax year makes a gain of £10,000. After the £3,000 allowance, £7,000 is taxable at 24%: £1,680. If she were a basic-rate taxpayer with enough of her basic-rate band unused to cover the whole £7,000, the tax would be 18%: £1,260.

How to work out your gain

Your gain is what you got for the tokens minus what they cost you. HMRC asks you to record the value of each transaction in pounds sterling, at the time it happens.

HMRC lists these allowable costs you can deduct:

• Transaction fees.
• Advertising for a buyer or seller.
• Drawing up a contract for the transaction.
• Making a valuation so you can work out your gain.
• A proportion of the pooled cost of your tokens (see below).

You can’t deduct costs you’ve already deducted against income for Income Tax, or the costs of mining, such as equipment or electricity.

Pooling: why your cost is an average

Because individual tokens of the same type aren’t identifiable, HMRC requires you to put each type of token into its own pool (the “section 104 pool”). The pool tracks two numbers: how many tokens you hold and their total cost. When you sell part of the pool, your allowable cost is the same fraction of the pool’s total cost.

Example. You bought 1 BTC for £20,000 in 2023 and another 1 BTC for £40,000 in 2024. Your pool is 2 BTC with a pooled cost of £60,000, an average of £30,000 per bitcoin.

In November 2026 you sell 0.5 BTC for £35,000 and pay a £100 fee.

Step	Amount
Proceeds	£35,000
Allowable cost: 0.5 ÷ 2 × £60,000	−£15,000
Fee	−£100
Gain	£19,900

Your pool now holds 1.5 BTC with a pooled cost of £45,000.

The same-day and 30-day rules

Pooling has two exceptions, and they apply first, in this order:

1. Same-day rule. Tokens you buy on the same day you sell tokens of the same type are matched with that sale first.
2. 30-day rule (often called “bed and breakfasting”). If you buy tokens of the same type in the 30 days after a disposal, the sale is matched with those new tokens, earliest disposal first.

Only what’s left over is matched with the pool.

These rules stop you from selling and immediately buying back just to create a loss or use up your allowance on paper.

Example. You hold 10 ETH in your pool with a pooled cost of £15,000. On 3 December you sell all 10 for £25,000. Against the pool, that would be a £10,000 gain. On 20 December, within 30 days, you buy 10 ETH back for £24,000.

The 30-day rule matches the 3 December sale with the 20 December purchase, so your gain is £25,000 − £24,000 = £1,000. Your pool keeps its original 10 ETH at £15,000 cost: the bigger gain hasn’t gone away, it’s still waiting in the pool for a future sale.

When crypto counts as income instead

According to HMRC, crypto you receive from employment, or from activities such as mining, staking or lending, counts as income.

• From your employer: the tokens are “money’s worth” and subject to Income Tax and National Insurance. For tokens that are readily convertible, such as bitcoin, your employer should deal with this through PAYE.
• Mining, staking and lending: if you’re not running a trade, these are taxed as miscellaneous income at their pound value when you receive them. Individuals have a £1,000 allowance that covers trading and miscellaneous income combined.
• Airdrops: HMRC says an airdrop you receive without doing anything in return, and not as part of a trade, isn’t charged to Income Tax. An airdrop received in return for, or in expectation of, a service is taxable as income.

The value you were taxed on as income becomes your cost for Capital Gains Tax. If you later sell those tokens, you calculate Capital Gains Tax as normal on any increase in value since you received them. HMRC also notes that tokens from an airdrop can produce a chargeable gain when you dispose of them, even if they weren’t taxed as income when you got them.

Losses

If you sell at a loss, you can use it to reduce your gains, but you have to report it to HMRC first. You have up to 4 years after the end of the tax year of the disposal to claim it.

Losses are deducted from gains in the same tax year first. If your total gain is still above the tax-free allowance, you can then deduct unused losses from earlier years. Losses you don’t need can be carried forward to future years.

Reporting and deadlines

You report crypto gains either in a Self Assessment tax return or, if you don’t normally file one, with HMRC’s real time Capital Gains Tax service. From the 2024/25 return onwards, Self Assessment has a dedicated cryptoasset section.

• Real time service: report by 31 December after the end of the tax year and pay by 31 January. For a gain in 2025/26, that means reporting by 31 December 2026 and paying by 31 January 2027.
• Self Assessment: your gains go on the return for that tax year.
• Over £50,000 in sales: if you’re registered for Self Assessment, you must report your gains if the total amount you sold assets for was more than £50,000, even if your gains are below the allowance.

If you owe tax from previous years that you didn’t declare, HMRC has a dedicated route: its guidance points to the Cryptoasset Disclosure Service.

Records HMRC expects you to keep

HMRC asks you to keep separate records for each transaction, including:

• The type of token.
• The date of the disposal.
• The number of tokens disposed of, and the number you have left.
• The value of the tokens in pounds.
• Bank statements.
• Your pooled costs before and after the disposal.

Exchanges can close or delete account history, so download your transaction exports regularly instead of relying on getting them later.

What exchanges now tell HMRC

From 1 January 2026, UK crypto service providers must collect information about their users under the international Cryptoasset Reporting Framework (CARF), which the UK applies to UK-resident customers as well as foreign ones. For individuals, that includes your name, date of birth, home address, country of residence and, for UK residents, your National Insurance number or Unique Taxpayer Reference.

Providers report each calendar year’s transactions to HMRC. The first reports, covering 2026, are due by 31 May 2027. HMRC also warns that individuals can face a penalty if they give false information to their provider.

In practice, HMRC will increasingly see the same transactions you are supposed to report. Keeping your own records and reporting correctly is the simplest way to avoid questions later.

Summary checklist

• Every sale, swap, purchase with crypto or gift (except to a spouse, civil partner or charity) is a disposal.
• Add up your gains for the tax year, take off losses and the £3,000 allowance, and apply 18% or 24%.
• Use the pooled average cost, after applying the same-day and 30-day rules.
• Treat staking, mining and lending rewards as income when you receive them.
• Claim losses within 4 years, and keep records of every transaction.