CGT on Crypto, NFTs and DeFi in the UK 2026/27

Cryptocurrency is no longer a niche concern for HMRC. The tax authority has acquired transaction data from UK exchanges, issues nudge letters to known holders and is actively pursuing unpaid CGT on cryptoassets. If you bought, sold, swapped or earned crypto in 2025/26 or earlier without declaring it, 2026/27 is the year to get your records in order. This guide explains how CGT applies to Bitcoin, Ethereum, NFTs, staking, DeFi and airdrops under UK law.

HMRC's Approach to Cryptoassets

HMRC does not treat cryptoassets as currency or gambling winnings. They are capital assets, similar to shares. That means most transactions trigger a capital gains tax calculation. The key principle is simple: a disposal occurs whenever you part with a cryptoasset -- whether you sell it for fiat currency, swap it for another crypto, use it to buy goods or transfer it (in most cases) to another person.

CGT Rates and Allowances 2026/27

The CGT annual exempt amount (AEA) for 2026/27 is GBP 3,000. Gains above this are taxable. The rate depends on your income:

• Basic-rate taxpayers (income plus gains up to GBP 50,270): 18% on cryptoasset gains
• Higher-rate and additional-rate taxpayers: 24% on cryptoasset gains

These rates apply to most capital assets including crypto. Note that the 18%/24% rates are the same as for residential property (excluding your main home) -- crypto no longer has a separate rate structure.

Calculating a Gain or Loss

To calculate your gain, you take the disposal proceeds minus the allowable cost (your acquisition cost plus transaction fees). HMRC applies a pooling method called the Section 104 pool, similar to the share pooling rules. Each type of token has its own pool; you cannot mix Bitcoin and Ethereum in the same pool.

There are two overriding rules that take priority before the pool applies:

• Same-day rule: If you buy and sell the same token on the same day, the purchase is matched against the sale first.
• Bed and breakfasting rule (30 days): If you sell a token and buy the same token within 30 days, the purchase is matched against the prior sale. This prevents you from selling to crystallise a loss and immediately rebuying.

Keep records of every transaction: date, quantity, value in GBP at the time, fees paid and the exchange used. Without records, HMRC will use its best estimate of the value -- usually not in your favour.

Swapping One Crypto for Another

Swapping Bitcoin for Ethereum is a disposal of Bitcoin for CGT purposes. The disposal value is the sterling market value of the Bitcoin at the time of the swap. Many holders do not realise this and fail to declare inter-crypto swaps. Each swap is a taxable event.

NFT Disposals

Non-fungible tokens are also cryptoassets for tax purposes. Selling an NFT, gifting it or swapping it for another NFT or crypto triggers a disposal. The CGT calculation follows the same rules as for fungible tokens. If you created and sold an NFT as a trade, the income may be treated as trading income subject to income tax rather than CGT -- the distinction depends on the frequency and commerciality of your activity.

Staking Rewards

Staking rewards are generally treated as income in the tax year you receive them, valued at the sterling price on the date of receipt. They are subject to income tax (not CGT) at that point. When you later sell the staked tokens, CGT applies to any gain between the income value (your acquisition cost) and the disposal proceeds.

DeFi: Lending, Liquidity Pools and Wrapped Tokens

Decentralised finance is one of the most complex areas. HMRC's guidance distinguishes between:

• DeFi lending: If you lend crypto and receive it back, HMRC may treat this as a disposal on lending and a re-acquisition on return, depending on whether beneficial ownership transfers.
• Liquidity pool tokens: Depositing tokens and receiving LP tokens in exchange may be a disposal. Removing liquidity is a further disposal.
• Wrapped tokens: Wrapping a token (e.g., BTC to WBTC) is likely a disposal if the underlying asset changes.

HMRC's published guidance on DeFi is evolving. Where the position is genuinely uncertain, document your reasoning and consider seeking specialist advice.

Airdrops

Airdrops received in return for nothing (no work, no service) are generally not subject to income tax at receipt, though they may be subject to CGT on disposal. Airdrops received as payment for a service are income. The distinction matters because income-taxed receipts form the cost base for future CGT calculations, whereas zero-cost airdrops have a GBP 0 base cost.

Reporting and Deadlines

CGT must be reported on a Self Assessment tax return. The deadline for paper returns for 2025/26 is 31 October 2026; for online returns, 31 January 2027. If your total gains exceed GBP 50,000 or your proceeds exceed GBP 50,000 (even if no tax is due), you must report them.

Penalties for late or inaccurate returns can be significant, and HMRC's Connect system matches exchange data against returns. The cost of getting it wrong consistently exceeds the cost of getting it right.

Use the CalcHub CGT calculator to estimate your capital gains tax liability on crypto and other assets: https://calchub.uk/calculators/capital-gains-tax