Capital Gains Tax on Crypto UK 2026/27

Quick answer

In the UK, capital gains tax applies to cryptocurrency because HMRC treats most cryptoassets as property rather than currency. Whenever you dispose of crypto — and "dispose" is much broader than cashing out — you crystallise a gain or loss measured in pounds.

For 2026/27 the headline numbers are simple: a £3,000 annual exempt amount, then 18% on gains that fall within your unused basic-rate band and 24% on gains above it. The genuinely tricky part is the calculation — pooling thousands of transactions across multiple tokens and exchanges, and applying HMRC's same-day and 30-day rules. This guide explains disposals, pooling, the allowance, the rates and reporting for 2026/27.

Why crypto is taxed as property, not money

HMRC's position is that exchange tokens such as Bitcoin and Ethereum are not currency or money. They are assets. That single classification drives everything: because they are assets, disposing of them is a chargeable event for capital gains tax, in the same way selling shares or a second property is.

This catches a lot of people out, because the most common taxable events have nothing to do with a bank withdrawal — swapping one coin for another is a disposal even though no pounds ever leave an exchange.

What counts as a disposal

You make a disposal — and potentially a taxable gain — when you:

• Sell crypto for fiat (pounds, dollars, euros).
• Swap one token for another — e.g. exchanging Bitcoin for Ethereum. This is two events: a disposal of the Bitcoin and an acquisition of the Ethereum, both valued in pounds at the time.
• Spend crypto on goods or services — the disposal value is the pound value of what you bought.
• Gift crypto to anyone other than your spouse or civil partner — the disposal is at market value, even though no money changes hands.

What is not a disposal:

• Buying crypto with pounds.
• Holding crypto, however much it rises on paper.
• Moving crypto between your own wallets.
• Gifting to a spouse or civil partner — this passes at your cost (no gain on transfer).

The token-to-token swap is the one that surprises people most. In a busy year of trading, you can rack up large taxable gains without ever seeing a penny in your bank account.

Working out the gain: the section 104 pool

For each type of token you hold, HMRC requires you to maintain a section 104 pool: a running total of the quantity held and the total allowable cost. When you dispose of some of that token, you deduct a proportionate slice of the pooled cost.

A simple example. You buy:

• 1 BTC for £20,000
• 1 BTC for £30,000

Your pool now holds 2 BTC at a total cost of £50,000, so the average cost is £25,000 per BTC. If you later sell 1 BTC for £40,000, your gain is £40,000 − £25,000 = £15,000. The remaining 1 BTC stays in the pool at £25,000.

This averaging is why you cannot simply pick which coins you sold — the pool blends them.

The same-day and 30-day rules

Before you reach the pool, two anti-avoidance rules can override it. They exist to stop people selling and rebuying purely to bank a gain or loss.

1. Same-day rule: crypto of the same type bought and sold on the same day is matched together first.
2. 30-day "bed and breakfasting" rule: if you sell a token and buy the same token back within 30 days, the disposal is matched against that repurchase rather than the pool.

These matter enormously for loss harvesting. If you sell at a loss and rebuy the identical token within 30 days, the 30-day rule blocks you from crystallising that loss against the pool — the loss effectively attaches to the new holding instead. To realise a usable loss you generally must wait more than 30 days before rebuying, or buy a different asset. Model the effect with the

.

The 2026/27 allowance and rates

For 2026/27:

• Annual exempt amount: £3,000. Your first £3,000 of total net gains (across all assets, not just crypto) is tax-free.
• 18% on gains falling within your unused basic-rate band.
• 24% on gains above the basic-rate threshold.

The rate you pay depends on your other income, because gains stack on top of income to decide how much falls in each band. Someone with a modest salary and a small gain may pay 18% on all of it; a higher earner pays 24% on most of it. Work out where your bands sit using the

, then apply the rate to the crypto gain.

Worked example: a year of crypto trading

Daniel earns £42,000 from his job and trades crypto on the side. Over 2026/27 his pooled calculations show net gains of £11,000 after offsetting some losses.

• Deduct the £3,000 exempt amount → £8,000 taxable gain.
• His salary of £42,000 leaves roughly £8,270 of basic-rate band unused (up to £50,270).
• So his £8,000 gain fits entirely within the basic-rate band → taxed at 18%.
• CGT due: £1,440.

Now suppose Daniel earned £60,000 instead. His basic-rate band is already used up by salary, so the whole £8,000 taxable gain is taxed at 24% → £1,920. Same gain, different bill, purely because of his income level. You can sanity-check the gain itself with the

.

When crypto is income, not a capital gain

Not all crypto activity is CGT. Some is income tax:

• Mining and staking rewards are usually taxed as income at the pound value when received (and may later create a CGT event when you dispose of them).
• Airdrops received in return for doing something can be income.
• Being paid in crypto by an employer is earnings, subject to income tax and NI.
• Genuinely trading as a business (rare for individuals) can make the whole activity income rather than capital.

Where crypto rewards are taxed as income, the self-employed reporting and tax can be modelled with the

. For most ordinary investors, though, CGT is the relevant tax.

Offsetting losses

Capital losses are valuable. Net losses in a year are first set against gains in the same year; any unused loss can be carried forward indefinitely, provided you report the loss to HMRC within four years of the end of the tax year in which it arose. Many crypto investors fail to register losses and lose the right to use them later. Given crypto's volatility, recording losses is often as important as recording gains.

DeFi, lending and the grey areas

Beyond simple buy-and-sell, much crypto activity sits in less settled territory, and HMRC's guidance has evolved to address it:

• Lending and staking through DeFi protocols: depositing tokens to earn a return can, depending on the arrangement, be treated as a disposal of the deposited tokens (if you give up beneficial ownership), with the rewards taxed as income or capital depending on their nature. The treatment turns on the specific protocol mechanics.
• Liquidity pools: adding to and removing from a pool can trigger disposals, because you are often exchanging tokens for pool tokens and back again.
• Wrapping tokens (e.g. ETH to wrapped ETH): HMRC's view can treat this as a disposal in some cases.
• NFTs: treated as assets in their own right, so buying and selling NFTs creates CGT events measured in pounds at each step.

The common theme is that moving value between forms usually counts as a disposal even without cashing out. If your activity is heavily DeFi-based, the calculation is genuinely complex and professional advice or specialist software is close to essential.

Spouses, gifts and inheritance

Transfers of crypto between spouses or civil partners are treated as no gain, no loss — the recipient takes on the giver's base cost, and no CGT arises on the transfer itself. This makes inter-spouse transfers a legitimate planning tool: a couple can each use their £3,000 annual exempt amount, and shifting tokens to the lower-income partner before a disposal can mean more of the gain falls in the 18% band rather than 24%.

Gifts to anyone else (children, friends, charities other than via qualifying routes) are disposals at market value, potentially crystallising a gain for the giver even though no money is received. On death, crypto is part of the estate for inheritance tax and beneficiaries inherit at the probate value, which becomes their new base cost — so unrealised gains during the deceased's lifetime are not subject to CGT on death.

Reporting crypto to HMRC

You report crypto gains either:

• Through Self Assessment — completing the capital gains pages, normally by 31 January after the tax year ends; or
• Via HMRC's real-time CGT service during the year.

You should report if gains exceed £3,000 or proceeds exceed £50,000. Keep records of: the date of each transaction, the type and quantity of token, the value in pounds at the time, any fees, and bank statements / wallet addresses. HMRC increasingly receives data directly from exchanges, so under-reporting is risky.

Most people with more than a handful of trades use crypto tax software to import exchange data and build the section 104 pools automatically — doing it by hand across multiple platforms is error-prone.

Practical steps for 2026/27

1. Export your full transaction history from every exchange and wallet.
2. Build the section 104 pools per token, applying same-day and 30-day rules.
3. Total your net gains and deduct the £3,000 exempt amount.
4. Apply 18%/24% based on where your income leaves your bands.
5. Report and pay via Self Assessment or the real-time service.
6. Register any losses within four years so you can carry them forward.

Putting it all together

Crypto is taxed as property, which means almost every move — selling, swapping, spending, gifting — can be a disposal even when no pounds appear in your account. Pool each token, respect the same-day and 30-day rules, deduct the £3,000 exempt amount, and apply 18% or 24% depending on your income. Watch the £50,000 proceeds reporting trigger, register losses so they are not wasted, and keep records good enough to satisfy HMRC. Model your numbers with the

and the .

Quick reference: the 2026/27 numbers

• Annual exempt amount: £3,000.
• CGT rate (basic band): 18%.
• CGT rate (higher band): 24%.
• Reporting triggers: gains over £3,000 or proceeds over £50,000.
• Loss claim window: report losses within four years to carry forward.
• SA deadline: 31 January after the tax year ends.

Common mistakes to avoid

• Thinking only cashing out is taxable — token-to-token swaps and spending are disposals too.
• Cherry-picking which coins you sold — the section 104 pool averages your cost.
• Falling foul of the 30-day rule when harvesting losses by rebuying too soon.
• Ignoring the £50,000 proceeds test and assuming low gains mean no reporting.
• Never registering losses, then being unable to carry them forward against future gains.

Crypto tax rewards good record-keeping above all else. Track every transaction, pool correctly, claim your losses, and apply the right rate for your income. Model the gain and the loss positions with the

and the before you file.

This article is general information, not financial advice. Figures use 2026/27 UK rates. Crypto tax is complex and HMRC guidance evolves — consider professional advice for high volumes or business-level activity.