How cryptocurrency is taxed in the UK
Quick answer: Most crypto is taxed as an asset: selling, swapping, spending or gifting it can trigger Capital Gains Tax above the £3,000 annual exempt amount, while crypto from mining, staking or as pay is taxed as income.
HMRC does not treat cryptoassets as money. Whether you owe tax depends on what you did with your crypto — holding is fine, but disposing of it usually counts for Capital Gains Tax, and earning it usually counts as income. The rules apply to Bitcoin, Ethereum, stablecoins, NFTs and other tokens alike.
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Primary source: HMRC Cryptoassets Manual, gov.uk
When Capital Gains Tax applies
You make a disposal — and potentially a taxable gain — when you sell crypto for pounds, swap one token for another, use crypto to pay for goods or services, or give it away to anyone other than your husband, wife or civil partner.
The gain is the sterling value at disposal minus the allowable cost of what you disposed of. HMRC uses pooling (a 'section 104 pool') plus same-day and 30-day matching rules to work out cost, so spreadsheets or crypto-tax software make this far easier.
Only gains above the £3,000 annual exempt amount (2026/27) are taxed — at 18% for basic-rate taxpayers and 24% for higher- and additional-rate taxpayers.
When crypto is taxed as income
Crypto you earn rather than buy is usually subject to Income Tax (and sometimes National Insurance) on its sterling value when you receive it. This covers mining rewards, staking rewards, airdrops received in return for doing something, and salary paid in crypto.
If you later dispose of those coins, a separate CGT calculation applies to any change in value since you received them.
Reporting and records
Report crypto gains and income through Self Assessment. Register by 5 October after the end of the tax year in which you first need to report, and file by the following 31 January.
Keep records of the type of token, dates, sterling values, wallet addresses and any fees. HMRC can request these, and good records are the difference between a quick return and a stressful reconstruction.
Common questions
- Do I pay tax just for holding crypto?
- No. Simply buying and holding crypto is not taxable. Tax only arises when you dispose of it (CGT) or earn it (Income Tax).
- Is swapping one coin for another taxable?
- Yes. Swapping token A for token B is a disposal of token A for CGT purposes, even though no pounds change hands.
- What if I lost money on crypto?
- Capital losses can be offset against gains and carried forward if you report them to HMRC, which can reduce future CGT bills.