How cryptocurrency is taxed in the UK
HM Revenue and Customs (HMRC) does not treat cryptocurrency or cryptoassets as currency or money. Instead, HMRC classifies cryptoassets as property or investment assets subject to Capital Gains Tax (CGT). When you dispose of crypto, tax is due on the gain (the disposal proceeds minus your allowable acquisition costs and transaction fees), rather than the total transaction value.
A taxable disposal occurs whenever you sell crypto for fiat currency (such as GBP, EUR, or USD), trade one cryptocurrency for another (for example, swapping BTC for ETH), pay for goods or services using crypto, or gift crypto to anyone other than your spouse or civil partner. Following the UK Autumn Budget, standard capital gains tax rates on crypto assets are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers.
Worked example of crypto Capital Gains Tax
Suppose an individual realizes a net profit of £20,000.00 from selling cryptocurrency during the tax year. The individual earns £30,000.00 in annual taxable salary (after the Personal Allowance). First, the statutory £3,000.00 Annual Exempt Amount (AEA) is deducted from the £20,000.00 capital gain, leaving £17,000.00 of net taxable gain.
The UK basic rate income tax band extends up to £37,700.00. Since taxable salary occupies £30,000.00 of this band, £7,700.00 of unused basic rate capacity remains. The first £7,700.00 of crypto gain is taxed at the basic CGT rate of 18%, resulting in £1,386.00. The remaining £9,300.00 falls into the higher rate band and is taxed at 24%, resulting in £2,232.00. Total Capital Gains Tax payable to HMRC is £3,618.00, representing an effective tax rate of 18.09% on the profit and leaving £16,382.00 in net retained gains.
HMRC crypto pooling rules: Same-day, bed-and-breakfast, and Section 104
Because crypto tokens of the same type are fungible, you cannot pick and choose which specific token you sold to calculate your cost basis. Instead, HMRC requires individuals to calculate acquisition costs using statutory share pooling rules applied in a strict order.
First is the 'Same-Day Rule': tokens acquired on the same calendar day as the disposal are matched first. Second is the 'Bed-and-Breakfast Rule' (30-day rule): tokens acquired within 30 days following the disposal are matched next, preventing artificial tax-loss harvesting. Finally, all remaining tokens are pooled into a 'Section 104 Holding', where the allowable cost is the pooled average acquisition cost of all tokens in that holding.
Allowable costs, allowable losses, and HMRC reporting
You can reduce your taxable capital gain by deducting allowable expenses directly incurred in buying, selling, or exchanging cryptoassets. Allowable costs include blockchain network fees (gas fees), exchange transaction fees, broker commissions, and professional valuation fees. Transfer fees between your own private wallets are non-deductible personal expenses.
If your crypto disposals result in a net loss, you can register those allowable losses with HMRC on your Self Assessment tax return. Allowable capital losses can offset other capital gains made in the same tax year or be carried forward indefinitely to reduce future gains. Furthermore, if a token becomes worthless or lost, you may submit a Negligible Value Claim to HMRC to realize an allowable loss.
For shares, investment funds, and other asset classes, visit our comprehensive Capital Gains Tax calculator.
If you are disposing of buy-to-let or second home real estate, use our property gain tax calculator.
To estimate total Self Assessment tax liabilities across all income and gains, see our tax return calculator.
To calculate your taxable earnings and remaining basic rate band, check the income tax calculator.
Inputs for the crypto tax calculator
Tax year
The UK tax year in which you sold, swapped, or disposed of your cryptocurrency.
Asset type
Asset classification under UK CGT rules; cryptocurrency falls under standard assets.
Total capital gain
Net disposal profit after deducting original acquisition costs and allowable transaction fees.
Allowable losses
Registered capital losses from current or previous tax years used to reduce your net taxable gain.
Annual taxable income
Total annual income after your Personal Allowance, determining how much of your basic tax band remains.
Taxpayer status
Individual taxpayers receive the full £3,000 exempt allowance; trustees receive £1,500.
CALCULATOR QUESTIONS
UK crypto Capital Gains Tax calculator questions
Do I have to pay tax on crypto in the UK?
Yes. HMRC taxes cryptocurrency disposals under Capital Gains Tax if you hold crypto as a personal investment. If you receive crypto as employment earnings, mining rewards, or staking yields, it is generally treated as taxable income subject to Income Tax and National Insurance.
What is the Capital Gains Tax rate on crypto in the UK?
Cryptocurrency capital gains above the £3,000 annual allowance are taxed at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers.
Does swapping one cryptocurrency for another trigger tax in the UK?
Yes. HMRC classifies trading or swapping one crypto token for another (e.g., swapping Bitcoin for Ethereum) as a disposal of the first token at fair market value in GBP, creating a taxable capital gain or allowable loss.
What is the UK crypto annual tax-free allowance?
The Capital Gains Tax annual exempt amount is £3,000 per individual (£1,500 for trusts). Net capital gains up to £3,000 across all assets in the tax year are completely tax-free.
Are gas fees and exchange transaction fees tax-deductible?
Yes. Exchange trading fees, transaction fees, and blockchain network gas fees directly related to an acquisition or disposal are allowable costs that reduce your taxable gain or increase an allowable loss.
Can I offset crypto losses against my salary or income tax?
No. Capital losses from cryptocurrency can only offset other capital gains (such as gains from shares or property), not employment or self-employment income. Unused allowable capital losses can be carried forward indefinitely to offset future capital gains.
How do I report crypto gains to HMRC?
You report cryptocurrency gains to HMRC via the Capital Gains Tax section of your annual Self Assessment tax return (SA108) or through HMRC's real-time Capital Gains Tax service by 31 January following the end of the tax year.