What you need to know: Crypto CGT in the UK: DeFi, staking, NFTs, the lot
Quick answer: UK crypto is taxed as a capital asset. Disposals over the £3,000 annual CGT allowance are taxed at 18% (basic rate) or 24% (higher rate) in 2026/27 for non-property gains. Every swap, sale, or spend triggers CGT — not just GBP conversions. Staking and DeFi rewards are taxed as income at the…
Key points:
- Selling crypto for GBP, EUR, USD, or any other fiat currency.
- Swapping one cryptocurrency for another (BTC → ETH is a disposal of BTC).
- Spending crypto to buy goods or services.
UK crypto is taxed as a capital asset. Disposals over the £3,000 annual CGT allowance are taxed at 18% (basic rate) or 24% (higher rate) in 2026/27 for non-property gains. Every swap, sale, or spend triggers CGT — not just GBP conversions. Staking and DeFi rewards are taxed as income at the point of receipt, then as CGT at disposal. HMRC has issued ~10,000 nudge letters to 2024 crypto holders identified through exchange data — usually targeting people who haven't filed Self Assessment despite disposals.
What counts as a disposal
HMRC treats the following as taxable disposal events:
- Selling crypto for GBP, EUR, USD, or any other fiat currency.
- Swapping one cryptocurrency for another (BTC → ETH is a disposal of BTC).
- Spending crypto to buy goods or services.
- Gifting crypto to anyone except your spouse or civil partner.
- Donating to charity (a CGT-free disposal — no gain or loss).
- Receiving crypto from a "yield farming" or DeFi pool (income tax point) — then later disposing (CGT point).
The 2026/27 CGT allowance is £3,000 per person. Gains above this are taxed at 18% or 24% depending on your other income.
The section 104 pooling rule
You don't track CGT on individual coin purchases. HMRC requires "pooling" — all of your holdings of a single cryptocurrency form one continuously-averaged pool. When you sell, the gain is calculated against the average cost of the pool, not first-in-first-out.
- You buy 1 BTC for £20,000 in January 2024.
- You buy 0.5 BTC for £30,000 in November 2025 (£60,000/BTC).
- Pool: 1.5 BTC, total cost £50,000, average £33,333/BTC.
- You sell 0.25 BTC in March 2026 for £20,000.
- Cost basis: 0.25 × £33,333 = £8,333. Gain: £20,000 − £8,333 = £11,667.
- After £3,000 allowance: £8,667 taxable. At higher rate 24% = £2,080 CGT owed.
The 30-day "bed-and-breakfast" rule
If you sell crypto and buy back the same crypto within 30 days, HMRC matches the disposal with the new purchase (not the section 104 pool). This blocks "harvesting" losses by quickly re-buying. Workarounds:
- Wait 31+ days before re-buying.
- Re-buy a different but correlated asset (BTC → ETH instead of BTC → BTC).
- Buy in a different wrapper (a spouse's account, but be aware of beneficial ownership rules).
Staking, mining, and DeFi rewards
Tokens earned from staking, mining, liquidity mining, or yield farming are income at the moment of receipt, valued at market price at that moment. Income tax applies at your p>When you la (20%/40%/45%) plus NI if it's a trading activity.
When you later dispose of those tokens, CGT applies on any gain since receipt. So the same tokens are taxed twice: once as income (when received) and once on the gain (when sold). The "second" cost basis is the value at the income point — not the original GBP cost of buying the staking token.
HMRC's distinction between "hobby" staking (taxed as miscellaneous income) and "trading" staking (taxed as self-employment income + NI) follows the badges-of-trade test: frequency, organisation, profit motive, time spent. For most retail stakers, miscellaneous income applies.
NFTs
Non-Fungible Tokens are treated as crypto-assets for tax purposes. Buying an NFT with ETH triggers CGT on the ETH disposal. Selling the NFT later triggers CGT on the NFT itself.
Two specific complications:
- Wash trades and self-dealing. If you sell an NFT to yourself via a related wallet, HMRC may disregard the transaction.
- Royalties. If you created the NFT and receive royalties from secondary sales, those royalties are income, not CGT.
HMRC nudge letters
From 2023 onwards HMRC has received transaction data from major UK crypto exchanges (Coinbase, Binance, Kraken, etc.) under the Common Reporting Standard. They cross-check this against Self Assessment returns. People with crypto activity but no CGT/income declaration receive a "nudge letter" prompting them to disclose.
The penalty for non-disclosure ranges from 0% (if you come forward voluntarily and within statute) to 200% of the tax owed (if HMRC finds deliberate concealment). The voluntary disclosure route — lent for crypto — is dramatic (WDF) or Let Property Campaign equivalent for crypto — is dramatically cheaper than waiting for HMRC to find you.
Record keeping — what HMRC actually wants
For every transaction:
- Date of disposal.
- Type of asset (which token).
- Number of units.
- GBP value at the date of disposal (use a reputable exchange rate at the time).
- Cost basis (from the section 104 pool).
- Gain or loss.
Specialist crypto tax software (Koinly, CoinTracker, Recap) connects to exchanges and wallets via API and auto-generates the reports. £100–£300/year for the typical retail crypto trader.
Sources and methodology
HMRC's crypto tax guidance is published in the Cryptoassets Manual. CGT rates for 2026/27 follow the post-Autumn 2024 budget: 18% basic rate and 24% higher/additional rate for non-residential property gains. For a personalised calculation, see the crypto tax calculator. The methodology page documents sources.
Related CGT and crypto guides
How UK Tax Drag holds itself to account
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