Do I pay Capital Gains Tax on cryptocurrency profits in the UK?

Full answer

HMRC treats cryptoassets such as Bitcoin and Ethereum as property for tax purposes, meaning that selling, swapping one cryptocurrency for another, spending crypto on goods or services, or gifting it (other than to a spouse or civil partner) can all count as a "disposal" that potentially triggers Capital Gains Tax, in exactly the same way as selling shares. For 2026/27, the £3,000 annual exempt amount applies to total gains across all your assets, including crypto, before any Capital Gains Tax is due, and the applicable rates are the "other assets" rates of 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers -- not the higher residential property rates. Crucially, swapping one cryptocurrency for another (for example, trading Bitcoin for Ethereum) is itself a taxable disposal of the first asset, even though no cash was ever converted to pounds sterling, which catches many crypto traders by surprise since they assume tax only applies once they cash out to a bank account. If your crypto trading is frequent, organised and resembles a trade or business rather than personal investment, HMRC may instead treat the profits as trading income subject to Income Tax and National Insurance rather than Capital Gains Tax, though this only applies in a small minority of cases involving genuinely business-like activity. Keeping detailed records of every crypto transaction, including dates, values in pounds sterling at the time, and the purpose of each transaction, is essential, since HMRC increasingly receives data directly from UK cryptoasset exchanges.

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