Answers · UK 2025/26
How is cryptocurrency taxed in the UK?
HMRC treats cryptocurrency as property — you pay Capital Gains Tax (18% basic/24% higher) when you dispose of crypto, including selling for fiat, trading one crypto for another, or using crypto to buy goods.
Full answer
HMRC's position (CRYPTO22000+) is that cryptoassets are **property for tax purposes**, not currency. This means CGT rules apply on disposal, not income tax (unless the crypto is received as earnings or from staking/mining). **Taxable disposal events:** - Selling crypto for GBP or other fiat currency - Exchanging one cryptocurrency for another (e.g. BTC → ETH) - Using crypto to purchase goods or services - Gifting crypto to anyone other than a spouse/civil partner **CGT rates and allowances (2026/27):** - Annual Exempt Amount: **£3,000** (gains below this are tax-free) - Basic rate taxpayer: **18%** on gains - Higher/additional rate taxpayer: **24%** on gains **Cost basis — section 104 pool:** HMRC uses the **section 104 pooling** method. All units of the same token are pooled, and the average cost is used to calculate each gain. Same-day and "bed and breakfasting" (30-day) rules also apply. **Staking, mining and DeFi:** - **Staking rewards and mining income** are typically taxed as **miscellaneous income** (income tax + Class 2/4 NI if self-employed) at the point of receipt — then CGT applies on later disposal. - **DeFi, liquidity pools, lending:** Complex — HMRC's CRYPTO22200 guidance applies. Depositing assets into a DeFi protocol may be a disposal if beneficial ownership transfers. **CARF reporting from 2026:** From 1 January 2026, UK crypto asset service providers must report user transaction data to HMRC under the Cryptoasset Reporting Framework (CARF) — HMRC will have visibility of exchange-level activity. **Record-keeping:** You must keep records of **every transaction**: date, quantity, value in GBP at time of transaction, fees paid, and wallet addresses. HMRC can request these. **Voluntary disclosure:** If you have undisclosed crypto gains from prior years, HMRC's **Cryptoassets Disclosure Service** allows voluntary disclosure — penalties are lower than if HMRC discovers the underpayment first.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.