How are cryptoasset staking rewards taxed in the UK in 2026/27?

Full answer

The UK does not have specific cryptoasset legislation, but HMRC's Cryptoassets Manual (updated in 2024) sets out how existing tax rules apply. For staking, the guidance distinguishes between income on receipt and CGT on disposal. Staking rewards -- income tax on receipt HMRC's position is that where staking rewards arise in circumstances where they are characterised as income (i.e., the reward is received in return for a service provided by the taxpayer -- validating transactions on a proof-of-stake network), the rewards are taxable as miscellaneous income under ITTOIA 2005 s687. The taxable amount is the GBP sterling market value of the tokens at the date and time of receipt. If you receive 1 ETH as a staking reward and ETH is worth GBP 2,500 at that moment, you have miscellaneous income of GBP 2,500 in that tax year. Miscellaneous income is subject to: -- Income tax at 20%, 40% or 45% depending on your tax band -- Reporting via Self Assessment (the staking income must be declared even if the tokens are not sold) CGT on subsequent disposal When you later sell or otherwise dispose of the staked tokens, CGT applies. The gain is calculated using the market value at the date of receipt (your cost base -- already taxed as income) as the acquisition cost, and the sale proceeds as the disposal value. Example: receive 1 ETH staking reward on 1 July 2026 when ETH = GBP 2,500. Report GBP 2,500 miscellaneous income in 2026/27. Sell on 1 January 2027 when ETH = GBP 3,000. CGT gain = GBP 500 (GBP 3,000 - GBP 2,500). This avoids double taxation -- income tax on receipt, CGT only on subsequent growth. DeFi lending and liquidity provision HMRC treats interest-like rewards from DeFi lending protocols similarly to staking -- as income on receipt. Liquidity provision (adding tokens to liquidity pools on decentralised exchanges) is more complex: HMRC may treat the adding and removing of liquidity as disposals for CGT purposes, with the income from trading fees being income. Mining income Cryptocurrency mining is treated differently. If carried on at a commercial scale it is likely to constitute a trade, with mining rewards as trading income subject to income tax and Class 4 NI. Small-scale hobby mining may be treated as miscellaneous income. Record keeping requirements HMRC requires taxpayers to keep records of every cryptoasset transaction including: -- Date of each staking reward and GBP value on that date -- Date of each disposal and GBP proceeds -- Any fees paid (which may be deductible costs) Cryptoasset-specific software such as Koinly, CoinTracker or CryptoTax Calculator can automate the calculation by connecting to exchanges via API and applying the UK share identification rules (same-day, 30-day, S104 pool) to all disposals. Annual Exempt Amount Total CGT gains (from cryptoassets and any other assets) above the GBP 3,000 AEA in 2026/27 are taxable. CGT on cryptoassets is taxed at 18% (basic rate) or 24% (higher rate) -- the same rates as other non-residential assets.

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