You pay UK tax on crypto when your gains or income go above HMRC’s allowances. HMRC treats cryptoassets as property, not money, so selling tokens, swapping one token for another, spending them or gifting them is a disposal for Capital Gains Tax. Gains above the £3,000 annual exempt amount are taxed at 18% or 24%. Tokens received from mining, staking or employment are usually taxed as income first. From 2027 HMRC will receive data from exchanges under the Cryptoasset Reporting Framework.
Do you pay tax on crypto in the UK?
Buying crypto and holding it is not taxable. Tax arises when you dispose of it, or when you receive tokens as income. HMRC does not see crypto as currency. Its Cryptoassets Manual treats exchange tokens such as bitcoin as chargeable assets, much like shares, so the Capital Gains Tax rules apply.
Is swapping one crypto for another taxable?
Yes. HMRC lists four types of disposal:
- selling tokens for pounds or another currency
- exchanging tokens for a different type of token, such as bitcoin for ether
- using tokens to pay for goods or services
- giving tokens away, unless the gift is to your spouse, civil partner or a charity
Every crypto to crypto swap needs a sterling value on the date it happens, even though no pounds reach your bank. A gift is valued at market value. Moving tokens between wallets you own is not a disposal, because you keep beneficial ownership throughout.
How do you work out the gain on crypto?
Your gain is what you received, less your allowable cost. Tokens of the same type are pooled, so each type has its own pool with an average cost.
Two matching rules come before the pool, and they work the same way as for shares:
- Same day rule. Tokens bought on the same day as a sale are matched with that sale first.
- 30 day rule. Tokens of the same type bought within 30 days after a sale are matched with that sale next, at their actual cost.
Only what is left comes out of the pool at average cost. The 30 day rule stops you selling at a loss and buying straight back. Transaction fees are allowable costs; mining equipment and electricity are not. NFTs are not pooled.
What are the Capital Gains Tax rates on crypto?
The annual exempt amount is £3,000 per person. Gains above it are taxed at 18% where they fall within your unused basic rate band and 24% above it. Higher and additional rate taxpayers pay 24% on all taxable gains. These rates apply for 2025/26 and 2026/27. See our guide to Capital Gains Tax rates.
When do you have to report crypto on your tax return?
You must report and pay if your total gains for the tax year are above the £3,000 allowance. If you are registered for Self Assessment, you also need to report gains where your total disposal proceeds were more than £50,000, even if the gain itself is below the allowance.
From the 2024/25 tax year, the Self Assessment return has a separate cryptoasset section within the capital gains pages. Figures go in pounds sterling. If you do not file a return, you can use HMRC’s real time Capital Gains Tax service instead. Filing dates are in our guide to Self Assessment deadlines and penalties.
What records does HMRC expect you to keep?
For every transaction: the token type, date, number of tokens, sterling value, pooled cost before and after each disposal, and bank statements. Download your exchange history regularly.
How are staking, mining and crypto pay taxed?
Staking and mining. Unless the activity is a trade, the sterling value of tokens at the time you receive them is miscellaneous income, less any appropriate expenses. The £1,000 tax free allowance for trading and miscellaneous income can cover small amounts. If you keep the tokens, that value becomes your cost, and any later rise is a capital gain when you dispose of them.
Paid in crypto by an employer. Tokens are money’s worth, so Income Tax and National Insurance apply. Where the tokens are readily convertible assets, such as bitcoin, the employer must operate PAYE. Otherwise you may need to pay the Income Tax through Self Assessment.
What if your crypto is lost or becomes worthless?
Losing a private key is not a disposal on its own. Where there is no prospect of recovering the key or the tokens, or the tokens have become worthless, you can make a negligible value claim. For pooled tokens the claim covers the whole pool. See our guide to negligible value claims.
How are companies taxed on crypto?
A company holding exchange tokens as an investment pays Corporation Tax on its chargeable gains when it disposes of them, using similar pooling rules. If the company trades in tokens, profits are trading income. Tokens held for use on a continuing basis may fall under the intangible fixed asset rules instead, depending on how they are accounted for.
What is CARF and what will HMRC see?
The Cryptoasset Reporting Framework is an OECD standard for sharing crypto data. Since 1 January 2026, UK cryptoasset service providers must collect details from their users: full name, date of birth, address, country of residence and a tax reference, which for UK residents can be a National Insurance number or UTR. A user who fails to provide these can be fined up to £300.
Providers must send their first report to HMRC between 1 January and 31 May 2027, covering the 2026 calendar year, and then by 31 May each year. The UK has extended the rules to UK residents using UK platforms, and international exchanges of data start in 2027. HMRC will be able to match that data to tax returns.
What should you do if HMRC writes to you about crypto?
HMRC is already sending letters to people it believes have undeclared crypto gains or income. More than 80,000 were issued in 2025/26, according to figures released under a freedom of information request. These letters ask you to check your returns and correct anything wrong.
If you do owe tax for earlier years, HMRC’s cryptoasset disclosure service lets you declare it voluntarily. You calculate the tax, interest and penalty yourself and pay within 30 days of submitting. How far back you go depends on your behaviour: 4 years if you took reasonable care, 6 years if you were careless and up to 20 years if the underpayment was deliberate. Do not ignore the letter. Pooled cost calculations across several exchanges take real work, and an enquiry can follow if the reply does not satisfy HMRC.
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Related guides: tax investigation insurance for crypto investors.
Reviewed by Matthew Bartlett, Director, Solar Protect. Last reviewed 29 September 2026. This guide is general information, not personalised tax or financial advice. Figures are correct for the 2025/26 and 2026/27 UK tax years at the time of writing.