Buying, selling or earning cryptocurrency can have tax implications in the UK, but exactly what you pay depends on what you're doing with your crypto.
This guide explains when Capital Gains Tax or Income Tax can apply, how your gains are calculated and what the new crypto reporting rules mean for you.
Last updated: September 2026
How Is Cryptocurrency Taxed in the UK?
There isn't a separate cryptocurrency tax in the UK. The tax you pay depends on what you're doing with your crypto and how HMRC treats that activity.
For individuals, the two main taxes to be aware of are Capital Gains Tax and Income Tax.
Capital Gains Tax
Most people who buy and hold cryptocurrency as an investment will fall under Capital Gains Tax rules.
You may have Capital Gains Tax to pay when you dispose of your crypto and make a gain. A disposal doesn't just mean selling it for pounds. Swapping, spending or gifting crypto can also count, which we'll explain in more detail below.
Income Tax
Income Tax can apply when you receive crypto as income, rather than simply buying it as an investment. This can include crypto received through certain mining, staking or lending activities, as well as crypto received through employment.
In less common cases, HMRC may also consider someone's crypto activity to amount to a financial trade. Where it does, profits are generally subject to Income Tax rather than Capital Gains Tax.
When Do You Pay Capital Gains Tax on Crypto?
If you hold crypto as an investment, Capital Gains Tax can apply when you dispose of it for more than it cost you.
A disposal includes:
- selling crypto for pounds or another currency;
- swapping one cryptocurrency for another;
- using crypto to pay for goods or services; and
- gifting crypto to someone else.
Gifts to your spouse or civil partner are generally treated differently and don't normally trigger Capital Gains Tax, provided you are living together.
One important point is that you don't have to cash your crypto out into pounds for a disposal to take place. Swapping Bitcoin for Ethereum, for example, is still a disposal of your Bitcoin for tax purposes.
What About Moving Crypto Between Your Own Wallets?
Moving crypto between wallets you beneficially own isn't normally a disposal because ownership hasn't changed.
However, if you pay a transaction fee using crypto, the tokens used to pay that fee can themselves count as a disposal.
How Much Capital Gains Tax Do You Pay on Crypto?
You pay Capital Gains Tax on your gain, rather than the total amount you receive when you dispose of your crypto.
Broadly, your gain is:
Your allowable costs can include the amount you originally paid for the crypto and certain transaction fees.
For the 2026/27 tax year, individuals have a £3,000 Capital Gains Tax Annual Exempt Amount. This applies across your taxable capital gains for the year, not separately to each crypto transaction.
Gains above your available allowance are generally taxed at 18% or 24%, depending on your taxable income and the amount of your gains.
How Are Crypto Gains Calculated?
If you've bought the same cryptocurrency at different times and prices, working out its original cost isn't always as simple as using the price you paid for the particular tokens you sold.
HMRC has specific rules for matching crypto purchases and disposals.
Crypto Pooling Rules
For Capital Gains Tax purposes, tokens of the same type are generally grouped together in what's known as a Section 104 pool.
For example, if you've bought Bitcoin several times at different prices, your holdings are generally treated as one pool with a combined allowable cost. When you dispose of some of your Bitcoin, a proportion of that pooled cost is used to calculate your gain.
Each type of cryptocurrency has its own pool, so your Bitcoin and Ethereum would be calculated separately.
Same-Day and 30-Day Rules
There are two matching rules that can apply before the Section 104 pool.
If you buy and dispose of the same type of crypto on the same day, those transactions are matched first.
If you dispose of crypto and then buy the same type again within the following 30 days, those transactions may also need to be matched before using the pooled cost.
These rules can make the calculation more complicated if you trade regularly, so keeping a complete record of your transactions is important.
Can Crypto Losses Reduce Your Tax Bill?
If you dispose of crypto for less than its allowable cost, you may make a capital loss. Allowable losses can generally be used to reduce your taxable capital gains, and unused losses can potentially be carried forward to use against gains in future tax years.
You'll need to report losses to HMRC if you want to use them, and specific rules can apply in some circumstances.
When Is Crypto Subject to Income Tax?
Income Tax can apply when you receive crypto as income, rather than buying it as an investment. The treatment depends on how you received it and, in some cases, whether your activity amounts to a trade.
Mining
Crypto received as a reward for mining is generally taxable based on its pound sterling value when you receive it.
If your mining doesn't amount to a trade, the rewards will normally be treated as miscellaneous income. If it does amount to a trade, the profits will instead be taxed as trading income.
Staking
Rewards received from staking can also be subject to Income Tax. HMRC considers factors such as the level of activity, organisation, risk and commerciality when deciding whether staking amounts to a trade.
Where it doesn't, the value of the tokens when you receive them will generally be treated as miscellaneous income.
Airdrops
Airdrops aren't automatically subject to Income Tax.
If you receive tokens without doing anything in return and they aren't connected to a trade or business, Income Tax may not apply when you receive them. However, an airdrop received in return for providing a service or carrying out an activity can be taxable as income.
You may still have Capital Gains Tax to consider when you later dispose of the tokens.
Being Paid in Crypto
If you receive cryptocurrency through your employment, its value is generally treated as employment income and subject to Income Tax and National Insurance, much like being paid in cash.
If you keep the crypto and its value subsequently increases, you may also have Capital Gains Tax to pay when you dispose of it.
Trading in Crypto
In some circumstances, buying and selling crypto can amount to a financial trade. If it does, profits are subject to Income Tax rather than Capital Gains Tax.
However, HMRC expects this to be unusual. Frequently buying and selling crypto doesn't, by itself, mean you're automatically classed as a trader.
Investor or Crypto Trader: What's the Difference?
HMRC says that most individuals buying and selling crypto are investors rather than financial traders. Calling yourself a trader, making frequent transactions or trading with the intention of making a profit doesn't automatically change that.
Whether your activity amounts to a trade depends on the overall circumstances, including factors such as its frequency, organisation and sophistication.
The distinction matters because investors are generally subject to Capital Gains Tax on disposals, while someone carrying on a genuine financial trade will generally pay Income Tax on their trading profits.
Crypto Reporting Rules From 2026
New crypto reporting rules came into effect in the UK on 1 January 2026 under the Cryptoasset Reporting Framework (CARF).
Crypto service providers covered by the rules must now collect and verify information about their users and transactions, with the first reports to HMRC due in 2027.
What Is CARF?
The Cryptoasset Reporting Framework (CARF) is an international tax reporting framework developed by the OECD.
It gives tax authorities greater visibility of crypto activity by requiring crypto service providers to collect information about their users and report certain transaction data. It also allows information to be exchanged between participating countries where users hold crypto through overseas providers.
Which Crypto Platforms Have to Report?
The rules apply to UK-based Reporting Cryptoasset Service Providers (RCASPs) that either carry out crypto transactions on behalf of users or provide a way for users to transact cryptoassets.
This can include crypto exchanges, brokers and dealers, as well as other services that facilitate crypto transactions.
A wallet that simply allows you to hold your own crypto isn't necessarily covered. What matters is whether the provider facilitates transactions rather than simply providing storage.
What Cryptoassets Are Covered?
CARF covers a broad range of cryptoassets used for payment or investment purposes.
This can include cryptocurrencies such as Bitcoin and Ethereum, stablecoins and NFTs, as well as other qualifying digital tokens. Some digital assets that fall under other financial reporting rules are excluded from CARF.
What Information Will Crypto Platforms Collect?
Crypto service providers must collect information that identifies their users and where they're tax resident.
For individuals, this includes:
- name;
- date of birth;
- home address;
- country of residence; and
- National Insurance number or Unique Taxpayer Reference for UK residents.
For companies and other entities, providers collect details including the legal business name, main address and relevant tax or company identification details. In some cases, information about the people who control the entity is also required.
Providers must verify this information as part of their CARF due diligence.
What Will Crypto Platforms Report to HMRC?
Providers don't simply report that you have a crypto account. Where a user falls within the reporting requirements, HMRC receives identifying information alongside a summary of their crypto transactions.
The transaction information collected includes the:
- type of cryptoasset;
- type of transaction;
- number of units; and
- value of the transaction.
This gives HMRC much greater visibility of crypto activity and the ability to compare reported transactions with an individual's or business's tax position.
When Will HMRC Receive the Information?
Although CARF took effect in 2026, the first reports aren't due until 2027.
After that, reports will generally be due by 31 May each year for the previous calendar year.
What Does CARF Mean for Crypto Investors?
CARF doesn't introduce a new tax on cryptocurrency or change the basic rules determining whether you owe Capital Gains Tax or Income Tax. What changes is the amount of information available to HMRC.
It also doesn't replace your own responsibility to report taxable crypto activity correctly. Keep your own records and make sure the figures you report to HMRC accurately reflect your transactions, even where your exchange or platform is also reporting information under CARF.
What Crypto Records Should You Keep?
Even though crypto platforms now collect more information under CARF, you're still responsible for keeping your own records and reporting your tax correctly.
For each transaction, it's useful to keep a record of:
- the type and amount of crypto involved;
- the date of the transaction;
- whether you bought, sold, exchanged or received it;
- its value in pounds at the time;
- what you paid for the crypto;
- any relevant transaction fees;
- the exchange or wallet used; and
- any crypto you received as income.
Keep supporting records too, such as exchange transaction histories, wallet addresses and relevant bank statements. This information will help you calculate your gains or income and support the figures you've reported if HMRC asks about them.
How Do You Report Crypto Tax to HMRC?
If your taxable crypto gains exceed your available Capital Gains Tax allowance, you'll need to report them to HMRC and pay any tax due.
Crypto gains can be reported through your Self Assessment tax return. Eligible UK residents may also be able to report Capital Gains Tax using HMRC's real-time Capital Gains Tax service.
If you've received taxable income from crypto, this may also need to be declared through Self Assessment.
The reporting requirements will depend on your overall tax position, so don't assume that using a platform which reports information to HMRC means your own reporting has been taken care of.
If you need help preparing or submitting your return, Ryans can support you with Self Assessment.
What If You Haven't Declared Crypto to HMRC?
If you realise you've previously had taxable crypto income or gains that weren't declared, it's worth dealing with the issue rather than waiting for HMRC to contact you.
HMRC has a specific service for disclosing unpaid tax on cryptoassets. The correct way to bring your tax affairs up to date will depend on which years are affected and whether the income or gains can still be reported or amended through Self Assessment.
If you're unsure what should have been declared, a tax adviser can help you review your previous crypto activity, calculate any tax due and make the appropriate disclosure to HMRC.
Need Help With Crypto Tax?
If you're unsure what tax you owe on your cryptocurrency or need help bringing your reporting up to date, Ryans can help.
Our team can help you calculate your crypto gains and income, prepare your tax return and deal with previous crypto activity that may need to be disclosed to HMRC.
Get in touch with our team to discuss your crypto tax position.
FAQ's
Do platforms like Coinbase or Binance report to HMRC?
Crypto platforms may be required to report information about their users and transactions under CARF.
UK-based crypto service providers within the rules must report relevant information to HMRC. If you use an overseas platform, information may also be shared with HMRC where the relevant country participates in CARF.
Whether a particular platform reports your activity directly to HMRC will therefore depend on where the provider is based and how the CARF rules apply to it.
Contact UsIs crypto mining legal in the UK?
Crypto mining is legal. However, the rewarded tokens are typically taxable as income at the time they’re received (based on fair market value), unless the activity qualifies as a trade, then trading profit rules may apply.
If you later dispose of those tokens, you may also face a Capital Gains Tax on any gain since receipt.
Contact UsDo You Pay Tax Just for Holding Cryptocurrency?
Simply buying and holding crypto doesn't normally trigger Capital Gains Tax. Tax generally becomes relevant when you dispose of the crypto, for example by selling, exchanging, spending or gifting it.
You may also have Income Tax to pay where you receive crypto as income.
Contact UsCan HMRC See My Crypto Transactions?
HMRC can receive information about crypto users and their transactions from crypto service providers. CARF significantly expands this reporting, with providers now collecting information from 1 January 2026 and the first reports covering transactions during the 2026 calendar year.
This is why it's important that your own records and tax reporting accurately reflect your crypto activity.
Contact UsDo I Need an Accountant for Crypto Tax?
Not necessarily. If you have a small number of straightforward transactions, you may be able to calculate and report your own crypto tax.
Professional advice can be useful where you have frequent transactions, use several wallets or exchanges, receive income through crypto, have historic activity that hasn't been declared or simply aren't sure how the tax rules apply to your circumstances.
Contact Us