How are crypto staking rewards taxed in the UK?

Full answer

HMRC generally treats crypto staking rewards as miscellaneous or, where it amounts to a trade, trading income. The default position for most individuals is that the sterling value of the tokens at the time you receive them is taxable income for that tax year, taxed at your marginal Income Tax rate alongside salary and other income. Income Tax stage: for 2026/27 the bands are 20% on income within the basic-rate range, 40% in the higher-rate range, and 45% above GBP 125,140 (Scottish rates differ). If your total income, including rewards, stays within your Personal Allowance of GBP 12,570 there may be no Income Tax, but you may still need to report. The Trading Allowance of GBP 1,000 can cover small amounts of qualifying miscellaneous income - if your rewards are below GBP 1,000 you may not owe Income Tax on them, though record-keeping still matters. Capital Gains stage: the GBP value at receipt becomes the acquisition cost (base cost) of those tokens. When you later dispose of them - selling, swapping for another crypto, or spending - any increase over that base cost is a capital gain. The Annual Exempt Amount is GBP 3,000 for 2026/27; gains above it are taxed at 18% within the basic-rate band or 24% for higher-rate gains. Worked example: you receive tokens worth GBP 800 when staked (income, likely covered by the trading allowance). You later sell them for GBP 2,500. The capital gain is GBP 2,500 - GBP 800 = GBP 1,700, which falls within the GBP 3,000 annual exemption, so no CGT is due that year provided you have no other gains. Who it affects: anyone earning rewards from proof-of-stake protocols, DeFi staking, or similar. Rules can vary with the specific arrangement, so keep dated records of every reward's GBP value. Use the income tax and capital gains tax calculators to estimate each stage, and check current HMRC crypto guidance.

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