United Kingdom cryptocurrency tax guide

What this guide covers

This guide covers how HMRC generally taxes individual cryptoasset activity for the 2025-26 tax year, which runs from 6 April 2025 to 5 April 2026. It's based on HMRC's own Cryptoassets Manual and GOV.UK's Capital Gains Tax pages, read directly for this guide. It doesn't cover corporate or business taxation of cryptoassets. This is educational information, not individualized tax advice.

Tax treatment of cryptocurrency

Most individual crypto activity in the UK falls under Capital Gains Tax (CGT), not Income Tax. HMRC does not treat cryptoassets as currency. Instead, HMRC's Cryptoassets Manual sets a specific test, read directly for this guide: if your crypto activity counts as trading, Income Tax applies instead of CGT. If it doesn't count as trading, it's investment, and CGT applies. Simply calling your activity "trading" doesn't make it trading for tax purposes — HMRC treats this as a question of fact, and points to case law on share and securities trading for guidance. HMRC's own stated view is that individuals trade exchange tokens only in exceptional circumstances. In practice, that means most individual activity defaults to CGT, not Income Tax.

Common taxable events

• Selling cryptoassets for GBP (or another fiat currency) — a CGT disposal.
• Exchanging one cryptoasset for another — HMRC treats this as a disposal of the asset given up, a separate CGT event even though no fiat currency changes hands.
• Spending cryptoassets on goods or services — treated as a disposal at the asset's value at the time of the transaction.
• Gifting cryptoassets to someone other than a spouse or civil partner — generally a disposal at market value for CGT purposes.
• Crypto received for employment, freelance work, or services rendered — taxable as income (and potentially subject to National Insurance) at the time of receipt.
• Certain mining and staking rewards — HMRC's manual distinguishes cases taxed as miscellaneous/trading income from the point of receipt from later CGT treatment on eventual disposal of the rewarded tokens.

Potentially non-taxable events

• Buying and simply holding cryptoassets is not a disposal and does not itself trigger CGT.
• Transferring cryptoassets between wallets or exchange accounts you control, with no change in beneficial ownership, is not a disposal.
• Gifts between spouses or civil partners living together are generally treated as a no-gain/no-loss transfer for CGT purposes (the receiving spouse inherits the original cost basis).

Tax rates and thresholds

You owe no CGT on the first £3,000 of gains in the 2025-26 tax year — this is the annual exempt amount, down from £12,300 in 2022-23 and £6,000 in 2023-24. Confirm the exact 2025-26 figure directly on GOV.UK's Capital Gains Tax rates and allowances page, since this guide's secondary sources weren't cross-checked against a GOV.UK archive page specific to 2025-26. Above that exempt amount, gains are taxed at 18% while they fall within your unused basic-rate band, and 24% once they exceed it. GOV.UK confirms these rates apply from 30 October 2024 onward, continuing through at least 2026-27. Crypto treated as income — earnings, trading profits, some staking — is taxed separately, at your marginal Income Tax rate, not the CGT rate.

Cost basis and calculation

HMRC requires "Section 104 pooling" for most fungible cryptoassets. Here's what that means: instead of tracking each coin's individual purchase price, you pool every unit of a given token together into one running total cost and one running total quantity. When you dispose of some of it, you use the average pooled cost per unit, not the price you actually paid for that specific coin. Two rules take priority over pooling. The same-day rule matches same-day acquisitions and disposals first. The 30-day rule matches a disposal to a repurchase of the same asset within 30 days — similar in spirit to the "bed and breakfasting" rule for shares. Directly attributable transaction fees are generally included in your cost basis.

Reporting and compliance

• Gains and losses are reported via Self Assessment, generally using the Capital Gains Tax summary pages (SA108) alongside the main return.
• Crypto treated as income is reported through the relevant Self Assessment income pages (employment, self-employment, or other income, depending on how it arose).
• For most online Self Assessment filers, the return and any balancing payment for a tax year are due by 31 January following the end of that tax year — confirm the exact date for 2025-26 directly on GOV.UK, since filing deadlines can shift and this guide does not independently re-verify every year's exact date.

Residency and cross-border issues

Your UK tax residence status — not your citizenship — generally determines whether your worldwide gains fall within UK CGT. That includes crypto disposals on non-UK exchanges: using an overseas exchange doesn't move a UK tax resident's gains outside the UK tax net. If you're a non-UK resident, or your residency history is more complex (a recent arrival, split-year treatment), check HMRC's residence guidance directly — this summary doesn't cover those cases in depth.

Example

This example is hypothetical, for illustration only. Priya buys £5,000 of a token, then buys another £2,000 of the same token — the two purchases pool together under Section 104 rules. She later sells part of her holding for £4,000, when her pooled average cost for that portion is £2,500. Her gain is £1,500. If this is her only disposal for the year and she has no other gains, that gain may fall within the annual exempt amount — but the exact outcome depends on her total gains for the year and the exempt amount in force, which she should confirm on GOV.UK.

Official resources

• HMRC Cryptoassets Manual: https://www.gov.uk/government/collections/cryptoassets-manual
• Capital Gains Tax rates: https://www.gov.uk/capital-gains-tax/rates
• Capital Gains Tax allowances: https://www.gov.uk/capital-gains-tax/allowances

Limitations and review information

Tax year covered: 2025-26. Last verified: October 10, 2026, against gov.uk/capital-gains-tax/rates and an actual HMRC Cryptoassets Manual page. Remaining gap: the exact 2025-26 annual exempt amount was corroborated from secondary sources, not independently re-confirmed against a GOV.UK archive page specific to that exact tax year — verify directly on GOV.UK before relying on the figure. This guide does not cover National Insurance treatment of crypto income, non-domicile rules, or business/company taxation of cryptoassets. This is educational information only, not individualized tax or legal advice.