Is swapping one cryptocurrency for another a taxable event in the UK?

Full answer

Many investors assume tax only arises when they cash out to pounds, but HMRC treats every crypto-to-crypto exchange as a disposal of the asset given up. The gain is measured in GBP: you take the sterling market value of what you received at the moment of the swap and subtract the allowable cost of the crypto disposed of, worked out using the same Section 104 pooling and 30-day matching rules that apply to shares. Worked example: you bought 1 token for GBP 2,000. Later you swap it for a different token when the first is worth GBP 5,000. That is a disposal with a GBP 3,000 gain even though you never touched cash. For 2026/27 the annual exempt amount is GBP 3,000, so if this is your only gain the whole amount is covered and no CGT is due, though you may still need to report if total proceeds exceed GBP 50,000. The new token enters its own pool at a cost of GBP 5,000. Spending crypto on goods, gifting it (other than to a spouse or charity), and converting to a stablecoin are all disposals too. CGT rates for 2026/27 are 18% within the basic-rate band and 24% above. Income tax can apply instead to mining, staking and airdrops. Keep a full transaction log because exchanges may not. Use the Capital Gains Tax calculator to estimate liability, and read HMRC's Cryptoassets Manual at gov.uk.

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