Are NFTs taxable in the UK in 2026?

Full answer

HMRC's position on non-fungible tokens (NFTs) is set out in its Cryptoassets Manual (CRYPTO80000 onwards) and confirmed in several publications. NFTs are treated as cryptoassets for UK tax purposes -- they are a type of digital token recorded on a blockchain that is unique and non-interchangeable. Capital Gains Tax on disposal: Selling an NFT is a disposal for CGT purposes. The gain is calculated as: sale proceeds minus allowable acquisition cost (including any gas fees paid on purchase and sale) minus other allowable costs. The Annual Exempt Amount (GBP 3,000 for 2026/27) applies. CGT rates: 18% (basic rate taxpayers) or 24% (higher/additional rate) on residential property and 18%/24% on other assets for 2026/27 following the Autumn Budget 2024 rate changes. Note: NFTs are not physical moveable property and so the GBP 6,000 chattel exemption (which applies to tangible personal possessions sold for less than GBP 6,000) does not apply. Even a small-value NFT sold for a gain is potentially within the scope of CGT. Pooling: unlike fungible cryptocurrency, each NFT is unique, so the standard Section 104 pooling rules (averaging the cost of identical assets) do not apply. Each NFT is treated individually with its own cost basis. Swapping: swapping one NFT for another, or swapping an NFT for cryptocurrency, is a disposal at market value of the NFT given away. This triggers CGT on the gain relative to the NFT's acquisition cost. Gifting: gifting an NFT is a disposal at market value at the date of gift -- even if you receive nothing in return. This can create a CGT liability payable by the donor. Transfers between spouses and civil partners are exempt. Income tax -- creating and selling NFTs as a trade: If you create and sell NFTs as a regular business activity (an artist, creator, or developer who mints and sells NFTs commercially), the income is trading income subject to income tax and Class 4 NI (for self-employed individuals). The NFTs in your inventory are treated as trading stock, not capital assets. Creator royalties from secondary sales are also income. Staking and DeFi income related to NFTs: fractionalized NFTs or yield-generating NFT protocols create additional complexity -- seek specialist advice. Losses: capital losses on NFT disposals can be offset against other capital gains in the same year or carried forward to future years. Record-keeping: keep records of acquisition dates and costs (in GBP at the date of each transaction), disposal dates and proceeds, gas fees, and wallet addresses. HMRC can request records going back years.

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