United Kingdom

HMRC has published detailed guidance on the tax treatment of cryptoassets — including capital gains, income events, DeFi, NFTs, and staking — through its Cryptoassets Manual (CRYPTO), regularly updated since 2019. Cryptocurrency is treated as a capital asset (property) for CGT purposes, and the rules that apply are largely drawn from existing capital gains tax legislation rather than crypto-specific statute. The framework is well-articulated and legally robust, supported by HMRC's active enforcement posture and the introduction of CARF exchange reporting from January 2026. The UK's CGT rate increase in the October 2024 Autumn Budget — raising the standard rate from 10% to 18% and the higher rate from 20% to 24% — has increased the tax cost of crypto disposal for UK residents.

Core Tax Treatment

Cryptocurrency is subject to capital gains tax on disposal. Disposals include sales for fiat, crypto-to-crypto swaps, using crypto to purchase goods or services, and gifting (except between spouses or civil partners). The CGT rates applicable from October 2024 are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers, applied to gains above the Annual Exempt Amount (AEA). The rate that applies depends on the individual's total taxable income and gains for the tax year — gains that fall within the basic rate band are taxed at 18%; gains above the higher rate threshold at 24%.

There is no holding period exemption in the UK — an asset held for ten years is taxed at the same rate as one held for ten days. No tapering relief, no long-term rate, no indexation allowance for crypto assets.

Section 104 Pooling

The UK requires the use of a Section 104 pool for same-asset cost basis calculation — a single blended average cost pool for all acquisitions of the same type of cryptocurrency. Unlike Germany's per-wallet FIFO or some other jurisdictions' lot-level tracking, the Section 104 pool merges all purchases of, say, Bitcoin into a single pool with a single average cost per coin. Each new purchase adjusts the pool's total cost and total quantity; each disposal reduces it proportionally.

This simplifies the cost basis calculation relative to FIFO in some respects, but creates a specific complication: the pool average shifts with every acquisition and disposal, meaning the tax consequence of a future sale changes every time new coins are purchased. Accurate pool tracking is essential, and unlike per-wallet FIFO, the pool is a single global figure regardless of where the coins are held.

The 30-Day Rule

The 30-day rule (bed and breakfasting rule) prevents a common loss-harvesting strategy. If you sell cryptocurrency and buy the same type of cryptocurrency within 30 days of the sale, the disposal is matched against the new acquisition rather than the Section 104 pool cost. The practical effect is that selling to crystallise a loss and immediately rebuying does not work in the UK — the disposal is matched at the higher recent purchase price, eliminating the intended loss. Any crypto sold and repurchased within 30 days must be tracked separately and matched against the repurchase cost, not the pool average.

The same-day rule adds a further layer: disposals and acquisitions of the same asset on the same day are matched against each other first, before the 30-day rule applies, and before the Section 104 pool is used.

Income Events

Staking rewards, mining income, airdrops received in exchange for services, and DeFi lending interest are all taxable as income — either as employment income, trading income, or miscellaneous income under Chapter 8 of the Income Tax (Trading and Other Income) Act 2005 — at the individual's marginal income tax rate (20%, 40%, or 45%). The income is assessed at the sterling value of the tokens at the date of receipt. Once received, the tokens become capital assets with an acquisition cost equal to the income amount declared — so the same tokens are subject to both income tax on receipt and capital gains tax on eventual disposal above that base cost.

Annual Exempt Amount

The Annual Exempt Amount (AEA) — the CGT-free allowance — was significantly reduced from £12,300 to £3,000 in April 2024 and has remained at £3,000 for 2025–26. This substantially narrows the practical benefit of the exemption for most crypto investors. Gains up to £3,000 net of losses are free of CGT; gains above this threshold are taxable at 18% or 24%.

HMRC Enforcement

HMRC is one of the most active crypto tax enforcement authorities globally. The Cryptoassets Taskforce has been operational since 2018, and HMRC has issued voluntary disclosure campaigns and issued information notices to UK exchanges requiring customer transaction data under existing powers. CARF reporting began in January 2026, giving HMRC access to transaction-level data from exchanges across all CARF-participating jurisdictions. HMRC has publicly stated that crypto tax compliance is a priority area and that data from exchanges will be used to identify non-filers and under-reporters.

Reporting

Capital gains from crypto must be reported via Self Assessment (SA100) with the Capital Gains Summary (SA108). The deadline for filing and paying is 31 January following the end of the UK tax year (5 April). Gains above the AEA must always be reported; all disposals must be reported if total proceeds exceed four times the AEA (£12,000 for 2025–26), even if the net gain is below the AEA. HMRC's Real Time CGT service allows in-year reporting for those who prefer not to wait for Self Assessment.