Crypto Tax UK 2026: Everything You Need to Know

HMRC treats cryptocurrencies as "crypto assets" (formerly "exchange tokens") under the HMRC Cryptoassets Manual (CRYPTO10000 onwards). Disposals — selling for fiat, swapping for another crypto, or using crypto to pay for goods/services — are subject to Capital Gains Tax (CGT).

CGT rates since 30 October 2024: 18% on gains within the basic rate band (taxable income up to £50,270), and 24% on gains above that threshold (higher/additional rate). These rates replaced the previous 10%/20% rates as part of the Autumn 2024 Budget — making the UK regime significantly less favourable than before.

The Annual Exempt Amount (CGT allowance) is £3,000 for 2024-25 and 2025-26, down sharply from £6,000 (2023-24) and £12,300 (2022-23). Gains below £3,000 across all your assets (not just crypto) are tax-free; gains above are fully taxable.

Example: you sell £15,000 of BTC with an acquisition cost of £8,000. Gain = £7,000. After the £3,000 allowance: £4,000 taxable. If you're a basic-rate taxpayer: £4,000 × 18% = £720. If you're a higher-rate taxpayer: £4,000 × 24% = £960.

The UK uses a unique cost basis method called "Section 104 pooling". For each crypto-asset (BTC, ETH, etc.), all your purchases form a single "pool" and the average cost is used to calculate gains on disposal.

Example: you buy 1 BTC at £20,000 in January and 1 BTC at £30,000 in May. Your Section 104 pool for BTC contains 2 BTC at a pooled cost of £25,000 each. If you sell 1 BTC at £40,000 in October, your gain is £40,000 − £25,000 = £15,000. The remaining 1 BTC stays in the pool at £25,000.

Two special matching rules apply BEFORE the Section 104 pool: (1) the "same-day rule" — any disposal is first matched with any acquisition of the same asset on the same day; (2) the "30-day rule" (or "bed and breakfasting" rule) — any disposal not matched same-day is then matched with any acquisition in the following 30 days. Only after these two rules does the remaining quantity touch the Section 104 pool.

These rules exist to prevent artificial tax-loss harvesting by repurchasing the same asset shortly after selling. Cost-basis calculation in the UK is therefore more complex than FIFO or weighted average — SafeTax handles all three layers automatically.

Unlike Portugal or Italy where some swaps are exempt, in the UK every crypto-to-crypto exchange is a disposal subject to CGT. Swapping BTC for ETH triggers a tax event: HMRC treats it as if you sold BTC for fiat at market value, then bought ETH at the same fiat value.

This means even pure trading activity between cryptocurrencies generates CGT liability. Each swap must be valued in GBP at the time of the transaction, the cost basis (from the Section 104 pool) calculated, and the gain/loss recorded.

DeFi swaps follow the same rule: a Uniswap trade BTC → ETH is a disposal. HMRC's 2022 guidance on DeFi (CRYPTO61000+) confirms this approach.

Mining and staking — Taxed as miscellaneous income at the GBP fair market value on the date received, unless your activity is sufficiently organised to be considered a trade (then Income Tax and National Insurance apply). The £1,000 "trading allowance" may cover small-scale activity but is restrictive.

Once received, the staking/mining rewards enter your Section 104 pool at the value declared as income. Subsequent disposal triggers CGT on any further gain.

Airdrops — Tax treatment depends on context. If received without expectation (e.g. as a marketing distribution to wallet holders), they are typically tax-free on receipt but become subject to CGT on disposal (with £0 base cost). If received for performing a service or as employment income, they are taxed as income at market value.

DeFi — HMRC's 2022 guidance treats liquidity provision and lending as potentially disposing of the underlying asset, depending on the legal nature of the protocol's smart contract. This is complex and case-by-case — for substantial DeFi activity, consider professional advice.

Crypto gains and income are declared via the Self Assessment tax return. Capital gains go on the SA108 supplementary form ("Capital Gains Summary"), with each disposal listed and total gains/losses calculated.

You must register for Self Assessment if your total gains exceed £3,000 OR if total disposal proceeds (not gains) exceed £50,000 in a tax year — even if no tax is due. This trips up many crypto users with high trading volume.

Mining/staking income goes on the main SA100 form under "Other taxable income" (or on SA103 if it's a trade).

Filing deadlines: 31 October (paper) or 31 January (online) following the end of the tax year (which runs 6 April to 5 April). For the 2025-26 tax year, the online filing deadline is 31 January 2027.

SafeTax calculates every value you need — pooled cost basis after matching rules, individual disposal gains/losses, total net gain — and presents them in a format ready to enter on SA108.

Mistake 1: ignoring the £50,000 disposal proceeds reporting threshold. Even if your gains stay below £3,000 (and you owe no tax), you must register for Self Assessment if your total disposal proceeds across all chargeable assets exceed £50,000.

Mistake 2: not applying the 30-day rule correctly. Many crypto users (and even some accountants) miss this rule, leading to incorrect cost-basis calculations on active trading wallets.

Mistake 3: treating crypto-to-crypto swaps as non-taxable. In the UK every swap is a disposal — this is fundamental to UK crypto tax and a frequent source of underreporting.

Mistake 4: forgetting that staking and mining rewards are taxed twice: first as income on receipt, then as capital gains on the difference between receipt-value and sale-value.

Mistake 5: relying on outdated tax rates. The 10%/20% CGT rates ended on 30 October 2024 — disposals from that date onwards are taxed at 18%/24%. Old guides and calculators may still show the wrong rates.