Important: this article is general education, not personal financial, tax or investment advice. Cryptoassets are high risk and largely unregulated in the UK; you could lose all the money you put in. Check current rules with HMRC or a qualified adviser. For advice on your own position, speak to a qualified tax adviser; free guidance is available from MoneyHelper.
Short answer: If you live in the UK and sell, swap, spend or give away cryptoassets, HMRC usually treats that as a disposal for Capital Gains Tax. You work out the gain in pounds, take off allowable costs, then set losses and the annual exempt amount against it. Allowances and rates change, so use the GOV.UK figures for the tax year of the disposal. Buying with pounds, or moving tokens between your own wallets, is not a disposal. Some employment, staking or mining tokens are taxed as income when you receive them.
In this guide
- When a crypto gain is taxed
- What counts as a disposal
- Pooling, the same-day rule and the 30-day rule
- Allowable costs and losses
- The annual exempt amount and tax rates
- When Income Tax applies instead
- Records to keep
- Reporting and deadlines
- Worked example with hypothetical numbers
- FAQ
When a crypto gain is taxed
HMRC treats cryptoassets held as a personal investment as assets, not as currency. The price can rise for years without Capital Gains Tax becoming due. The tax is looked at on a disposal, and only on the gain, which is proceeds in pounds minus allowable costs.
The practical overview is the GOV.UK guidance on tax when you sell cryptoassets. The detail is in the HMRC Cryptoassets Manual. Ordinary tokens are covered. Many NFTs are covered too, though a unique NFT is normally worked out on its own rather than in a shared pool.
A tax year runs from 6 April to 5 April. Add that year’s chargeable gains, subtract that year’s allowable losses, and compare the result with the annual exempt amount. Crypto gains share that allowance with other capital gains, such as gains on shares.
Swaps and spending are the disposals people miss, because no pounds need to land in a bank. A fall in price while you still hold is not yet an allowable loss.
These are individual rules. A company is taxed differently, so do not use this article for limited-company holdings.
The FCA information on cryptoassets warns that this market is high risk and that you could lose all the money you put in. Tax treatment does not lower that risk. If you have not bought yet, sort an emergency fund before investing, so a tax bill or a price fall is not paid from money you need for ordinary bills.
What counts as a disposal
GOV.UK treats these as disposals:
- selling for pounds or other fiat currency
- swapping for another cryptoasset, including a stablecoin
- spending crypto on goods or services
- giving crypto away, unless the recipient is your spouse or civil partner
A gift to a spouse or civil partner you live with is normally a no-gain, no-loss transfer. They inherit your cost. If you have separated, the window can be limited, so check the current rule.
A gift to anyone else, and a non-commercial sale to other close family, is usually brought up to market value in pounds. Receiving nothing does not, by itself, remove the gain.
Buying with pounds, moving tokens between your own wallets, and simply holding are not disposals.
On a swap, you dispose of the old token and acquire the new one. The pound value of the swap is both the proceeds of the old token and the starting cost of the new one, plus any acquisition fee.
For a fork, use the manual. HMRC’s published view has been that you have not disposed of the original tokens merely because a new token arrived, and that a new token you did not pay for can have a nil cost.
Being scammed, locked out of an exchange, or losing a key is not an automatic capital loss. Ownership, value and what you received all matter. Keep the evidence and get advice if the amount is large. Read the guide to avoiding crypto scams before you send tokens to anyone who contacted you first.
Pooling, the same-day rule and the 30-day rule
You cannot choose the purchase that gives the smaller gain. The Cryptoassets Manual uses share matching rules.
The same fungible token goes into one Section 104 pool, wherever it is held. Bitcoin and Ether are separate pools. A unique NFT is usually kept out of the pool and matched to its own cost.
Track the number of tokens and the total pound cost. A buy adds to both. A pool-matched sale removes the tokens and the same share of the cost.
Match in this order:
- Same-day rule: tokens of that type bought on the day of the disposal.
- 30-day rule: tokens of that type bought in the 30 days after the disposal. Earlier buys are already in the pool.
- Section 104 pool: what is still unmatched, at average cost.
The 30-day rule, sometimes called the bed and breakfast rule, is there to stop a paper loss. Sell and rebuy the same token within 30 days, and the sale pairs with the new buy. That quantity does not come out of the old pool. Calculate in pounds, and record any exchange rate you used.
Allowable costs and losses
Allowed costs are limited. They normally include the pound price, exchange and network fees on the buy or the sale, and a professional fee wholly tied to that disposal. Paying with another cryptoasset means the cost is the pound value you gave up.
Your time, a phone or laptop, loan interest, and any fee already deducted against income are not capital costs.
If proceeds are lower than costs, that can be an allowable loss. Losses of the year reduce gains of the year before the annual exempt amount is used. Unused losses carry forward against later gains, not against salary, but only if you claim them. The window is often four years from the end of the tax year. Check it.
A cheap gift to family, or a sale to a connected person below market value, does not create a useful loss. Market value is used instead.
A negligible value claim is a formal claim for an asset you still own that is worth almost nothing. A lost password is not that claim. The conditions are in the HMRC Cryptoassets Manual.
The annual exempt amount and tax rates
The annual exempt amount is the slice of net capital gains an individual can have in a tax year without Capital Gains Tax. Do not take the pound figure, or the rates, from this article. Both change. Use the GOV.UK guidance on tax when you sell cryptoassets for the year in which you disposed of the tokens.
What stays true when the numbers move:
- The allowance reduces gains, not sale proceeds.
- Crypto and other assets share one allowance for the year.
- What you do not use is lost. It does not carry forward.
- Only the excess is taxed.
- Which rate applies depends on your taxable income and the basic-rate band left after that income. Capital Gains Tax rates are not Income Tax rates.
- Scottish income tax bands can change how much of a gain sits at each Capital Gains Tax rate. If Welsh income tax rates differ in your year, check that effect too.
An exchange will not usually pay the tax for you. A result inside the allowance can mean nothing to pay, and you may still have to report.
When Income Tax applies instead
Income Tax can arise when you receive tokens, before any disposal. GOV.UK points to employment, and to some mining, staking and airdrops, as cases where Income Tax and National Insurance may be due.
Pay from an employer is employment income at the pound value on receipt. That value is normally your later capital cost.
Mining or staking rewards can also be income on the day they arrive. For many individuals that is miscellaneous income, not a trade. An organised, repeated operation run for profit can be a trade, and then these capital gains rules are the wrong ones. The HMRC Cryptoassets Manual describes the difference. If this is regular, take advice.
An airdrop you did nothing for has generally not been taxed as income, though the cost may be nil. An airdrop you earned can be income.
In decentralised finance, a loan, a stake or a liquidity deposit is a disposal only in some designs. It turns on whether you gave up beneficial ownership. Check the manual for that product rather than assuming the move was tax-free.
Once a value has been taxed as income, use it as cost. Do not start the capital calculation from zero.
Records to keep
Build the record as you go. HMRC can ask to see it.
For each movement, keep the date, the asset, the quantity and the type of event: buy, sell, swap, spend, gift, fork, airdrop, reward or wages. Also keep the pound value, any conversion rate, the fees, the wallet or exchange, and what came back on a swap.
Keep the income figure next to the capital one, so the amount taxed as income is the cost you use later.
Download CSV files while the account still exists. Bank lines show cash, not the pool.
Retain the file for several years. The exact period depends on how you file, so confirm it on GOV.UK if you are unsure.
Reporting and deadlines
The relevant year is the year of disposal, from 6 April to 5 April, not the year you bought.
A report is often required if gains exceed that year’s annual exempt amount, or if disposal proceeds exceed four times that amount, even where no tax is due. Look up the allowance, because it is part of both tests. If the return notes for that year say something more specific, follow the notes.
If you need Self Assessment and you are not already in it, tell HMRC by 5 October after the tax year. The online deadline is normally 31 January after the year ends, and that is also the normal payment date for this tax. Cryptoassets are not UK residential property, so the 60-day property rule does not apply. HMRC’s real-time Capital Gains Tax service has its own dates if you use it. Check whether those gains still belong on your return.
Late filing or payment can mean penalties and interest. Check the current amounts on GOV.UK rather than relying on a figure you remember.
Under both tests, with no tax due, you may not need a return. Keep the workings. A loss you want to carry forward still has to be claimed in time.
Worked example with hypothetical numbers
Every figure below is invented, for a fictional holding, to show the method. Nothing here is your tax. The £3,000 allowance is assumed only so the subtraction can be seen. It is not a statement of the allowance in force. Use the figure on GOV.UK for the real year. Do not copy these numbers into a return.
The holding is one fungible token, Token A, in a single pool.
On 2 May the holder buys 4 tokens for £8,000 plus an £80 fee. Pool: 4 tokens, cost £8,080.
On 2 June they buy 1 more for £2,400 plus a £20 fee. Pool: 5 tokens, cost £10,500.
On 1 August they sell 2. Net proceeds, after a fee, are £5,950. They buy none that day and none in the next 30 days, so the pool is used. Cost is 2/5 of £10,500, which is £4,200. Gain: £1,750. Pool left: 3 tokens, cost £6,300.
On 10 September they sell 1 for net proceeds of £1,800. On 1 October, inside 30 days, they buy 1 for £2,020 including the fee. The September sale matches the October buy, not the pool. Loss: £220. The pool stays at 3 tokens and £6,300, because the new token was used in the match.
On 1 December they sell the remaining 3 for net proceeds of £9,000, with no same-day buy and no buy in the next 30 days. Gain: £2,700.
| Disposal | Matched with | Result |
|---|---|---|
| 1 August, 2 tokens | Section 104 pool | Gain of £1,750 |
| 10 September, 1 token | Buy on 1 October (30-day rule) | Loss of £220 |
| 1 December, 3 tokens | Section 104 pool | Gain of £2,700 |
Gains of £1,750 and £2,700 come to £4,450. After the £220 loss, the net gain is £4,230. Against the assumed £3,000 allowance, £1,230 would be taxable in this illustration. The rate is not worked here. It depends on income and on the bands for that tax year.
Net proceeds are £5,950 plus £1,800 plus £9,000, which is £16,750. Four times the assumed allowance is £12,000, so these proceeds would also need a reporting check. A different real allowance would move both the tax and the test.
Same-day variant, not included in the totals above: if the holder had also bought 1 token on 1 December, the same-day rule would match 1 token of that sale to the new buy first. Only the other 2 would take cost from the pool.
FAQ
Do I pay Capital Gains Tax if I only buy and hold?
Not on the holding itself. There is no disposal, so there is no capital gain and no capital loss merely because the price moves. You might still owe Income Tax if the way you received the tokens was taxable.
Is a transfer to my own wallet a disposal?
No, not where you remain the beneficial owner. Record it anyway. You will need the trail when you do sell, swap or spend.
I swapped into a stablecoin. Is that still “in crypto” for tax?
The swap is still a disposal of the token you gave, at its pound value that day. The stablecoin starts with that value as its cost. Staying in cryptoassets does not pause Capital Gains Tax.
My gains are under the allowance. Do I still tell HMRC?
Sometimes. If your disposal proceeds are more than four times the annual exempt amount, you can have a reporting duty even though no tax is due. Use that year’s figure from GOV.UK, and follow the return notes.
Can I claim a loss for tokens I still have?
Only in specific cases, such as a negligible value claim where you still own an asset worth almost nothing. A price drop, a lost password or a scam is not automatically that claim.
What if the exchange no longer has my history?
Rebuild what you can from bank payments, old emails, wallet history and any CSV you can still download. Where you have to reconstruct a value, keep a note of the source and the rate. Do not fill gaps with numbers you cannot explain.
