Glossary · UK

What is NFT Tax?

How UK tax applies to buying, selling and creating non-fungible tokens, usually through Capital Gains Tax or Income Tax depending on the activity.

Full Definition

NFT tax refers to how UK tax rules treat non-fungible tokens -- unique digital assets recorded on a blockchain. HMRC generally treats NFTs as chargeable assets rather than currency. If you buy and later sell an NFT as an investment, any gain is normally subject to Capital Gains Tax, charged at 18% within the basic-rate band and 24% for higher and additional-rate taxpayers, after the Annual Exempt Amount of GBP 3,000. Disposals include selling for crypto or fiat, swapping one NFT for another, or gifting it, and you must calculate the gain in pounds at the time of each transaction. If you create, trade or mint NFTs as a business or with sufficient frequency and organisation, profits may instead be taxed as trading income under Income Tax and National Insurance. Royalties from NFTs are typically taxable income. Keep detailed records of acquisition costs, dates and sale values. Rules are evolving, so check current gov.uk cryptoasset guidance.