How to Do Crypto Taxes in the UK: A 2026 Guide for Traders

Overview

In the UK, cryptocurrency is treated as property, not money.
This means most crypto activity is taxed under Capital Gains Tax (CGT), with some cases falling under Income Tax.

HMRC has not changed this position in 2026. What has changed is enforcement:
exchanges now share more data, and HMRC expects accurate, transaction-level reporting.

If you trade crypto, you are responsible for calculating and reporting your tax correctly — even if no one contacts you.

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What Counts as a Taxable Crypto Event

HMRC considers the following actions as disposals, which may trigger Capital Gains Tax:

• Selling crypto for GBP or another fiat currency
• Swapping one cryptocurrency for another (e.g. BTC → ETH)
• Spending crypto on goods or services
• Gifting crypto (except to a spouse or civil partner)

Each disposal must be recorded with its GBP value at the time.

How Capital Gains Are Calculated

For every disposal, HMRC uses this formula:

Capital Gain = Disposal value – Cost basis

Your cost basis includes:

• Purchase price
• Transaction and exchange fees

You only pay CGT if your total gains exceed the annual exempt amount, which is £3,000.

That figure was cut from £6,000 to £3,000 for the 2024–2025 tax year, and has stayed at £3,000 for both 2025–2026 and 2026–2027. Plenty of guides still quote £6,000 or £12,300 — those are older tax years.

Important HMRC Rule: Section 104 Pooling

UK traders cannot choose FIFO or LIFO. HMRC matches every disposal in a fixed order:

1. Same-day rule — tokens bought and sold on the same day are matched first.
2. 30-day rule — tokens repurchased within 30 days of a sale are matched next, which is what stops "bed and breakfasting".
3. Section 104 pool — everything left over is pooled, and the pool's average cost becomes your cost basis.

Only what survives the first two rules reaches the pool. See FIFO vs LIFO and why the UK uses Section 104 pooling for worked examples.

Manually applying this across hundreds of trades is error-prone.

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Income Tax: Staking, Mining, and Airdrops

Crypto received as a reward is treated as income at its GBP value on the day you receive it.

This includes:

• Staking rewards
• Mining income
• Some airdrops

Later, when you sell those tokens, Capital Gains Tax applies again to any increase in value.

This two-step taxation is one of the most common reporting mistakes.

Watch: UK crypto tax explained

Pooling and the matching rules are much easier to follow when you can see them applied. This covers the same ground on video:

Tax Rates in 2026

• Capital Gains Tax — on gains above the £3,000 exempt amount

  • 18% where the gain falls inside your basic-rate Income Tax band
  • 24% on gains above the basic-rate band

• Income Tax — on staking, mining and airdrop income

  • 20%–45% depending on your band in England, Wales and Northern Ireland
  • Scotland sets its own bands and rates, so Scottish taxpayers should check those separately

The 18% / 24% CGT rates replaced the previous 10% / 20% rates for disposals made on or after 30 October 2024. Guides quoting 10% / 20% are describing a tax year that has passed.

You can reduce your tax bill by:

• Claiming allowable fees
• Offsetting capital losses
• Carrying losses forward to future years

How to Report Crypto to HMRC

Crypto tax is reported through Self Assessment.

You must:

1. Declare capital gains in the SA108 Capital Gains Summary
2. Declare staking or mining income as taxable income
3. Keep your records — at least 22 months after the end of the tax year if you are not self-employed, or 5 years after the 31 January filing deadline if you are self-employed or in a partnership

HMRC may request:

• Transaction dates
• GBP values
• Wallets and exchanges used
• Trade history and references

Start tracking crypto transactions

Common Mistakes UK Traders Make

• Forgetting that crypto-to-crypto swaps are taxable
• Ignoring transaction fees
• Using FIFO instead of Section 104 pooling
• Missing staking income
• Losing historical trade data when switching exchanges

These errors usually surface during an HMRC review — when it’s already too late. Each one is unpacked in the ten most common UK crypto tax mistakes.

Increased HMRC Oversight in 2026

The UK is implementing international crypto reporting standards, including automatic data sharing from exchanges.
This means HMRC can already see more than many traders expect.

Accurate records are no longer optional.

Conclusion

Crypto taxes in the UK follow clear rules:

• Track every transaction
• Apply Section 104 pooling
• Report gains and income correctly
• Keep records long-term

Doing this manually is possible — but inefficient.

Open CryptoTaxBridge

Official Resources

• HMRC: Capital Gains Tax rates and allowances
• HMRC: Capital Gains Tax rates
• HMRC Cryptoassets Manual: pooling and matching rules (CRYPTO22200)
• HMRC: How long to keep your records

This article provides general information and is not tax advice. Rates, allowances and reporting duties depend on your circumstances and on the tax year you are filing for. Figures above reflect the 2026–2027 UK tax year.