HMRC is clear: cryptocurrency is an asset and gains from disposing of it are taxable. Whether you trade Bitcoin, stake Ethereum, or sell NFTs, you may owe Capital Gains Tax. This guide covers the rules for individuals in 2026/27.
What counts as a "disposal"?
A taxable disposal occurs when you:
- Sell crypto for GBP (or any fiat currency)
- Swap one crypto for another (e.g. BTC → ETH)
- Use crypto to pay for goods or services
- Give crypto away (unless to a spouse/civil partner)
Simply holding crypto, transferring between your own wallets, or buying crypto with GBP are not disposals.
Capital Gains Tax rates
Crypto gains are taxed at CGT rates after deducting the Annual Exempt Amount:
- Annual Exempt Amount: £3,000 (2026/27)
- Basic rate taxpayers: 18% on gains within the basic band
- Higher/additional rate: 24% on gains above the basic band
Your gain is added to your income to determine which CGT rate applies. If your salary plus the gain exceeds £50,270, the excess is taxed at the higher rate.
How to calculate your gain
Gain = proceeds − allowable costs. Allowable costs include:
- The amount you paid for the crypto (cost basis)
- Transaction fees (gas fees, exchange fees)
The cost basis must be calculated using HMRC's pooling method (Section 104 pool) — not FIFO or LIFO. Each crypto asset has its own pool. The "same-day" and "30-day" rules also apply to prevent artificial loss creation.
When crypto is treated as income
In some cases, crypto receipts are taxed as income (not CGT):
- Mining or staking rewards — taxed as miscellaneous income
- Airdrops for a service — taxed as income
- Salary paid in crypto — taxed as employment income
- DeFi lending interest — potentially income
When these tokens are later sold, CGT applies to any gain above the value at which they were received.
Reporting to HMRC
If you have taxable gains above the £3,000 exempt amount, you must report them on a Self-Assessment tax return (the Capital Gains supplementary pages). Even if your total gains are below £3,000, you should keep records in case HMRC enquires.
Understand your tax position
Use the income tax calculator to determine which tax band you fall into — this determines whether your crypto gains are taxed at 18% or 24%.