Crypto assets have become a popular investment, but many investors are unaware of the tax implications. HMRC treats cryptoassets as property for tax purposes, which means you may be liable to Capital Gains Tax (CGT) when you dispose of them. This guide explains the rules for the 2026/27 tax year and how to stay compliant.
For a complete overview of CGT, see our Capital Gains Tax Guide. For more expert tax guidance, visit our homepage.
How HMRC Treats Cryptoassets
HMRC does not consider cryptoassets to be currency or money. Instead, they are treated as property for tax purposes. This means:
Capital Gains Tax
You pay CGT when you dispose of cryptoassets.
Income Tax
You may pay Income Tax on crypto received from employment, mining, or airdrops.
National Insurance
You may pay NIC on crypto received as employment income.
When Do You Pay CGT on Crypto?
You pay CGT when you dispose of cryptoassets. A disposal includes:
- Selling crypto for fiat currency (e.g., GBP, USD).
- Exchanging one crypto for another (e.g., Bitcoin for Ethereum).
- Using crypto to pay for goods or services.
- Gifting crypto (unless to a spouse or civil partner).
Important: Simply holding crypto does not trigger a CGT liability. You only pay CGT when you dispose of it.
How to Calculate Your Gain on Crypto
Calculating your gain on crypto is similar to shares, but can be more complex due to the volume of transactions.
Step 1: Calculate the Sale Proceeds
- The value of the crypto at the time of disposal (in GBP).
Step 2: Calculate the Purchase Costs
- The original purchase price of the crypto.
- Add any purchase costs (e.g., exchange fees).
Step 3: Subtract the Costs from the Proceeds
- This gives you the gain.
Step 4: Deduct Your Annual Exempt Amount
- Deduct £3,000 from the gain. See our guide: Capital Gains Allowance.
Step 5: Apply the CGT Rate
- Apply the 18% or 24% rate, depending on your income.
Crypto Pooling Rules
HMRC uses pooling rules for crypto, similar to shares.
Important: Unlike shares, crypto pooling can be more complex because you may have many small transactions.
Allowable Costs for Crypto
You can deduct certain costs when calculating your gain:
💰 Purchase price
The cost of acquiring the crypto.
🔄 Exchange fees
Fees paid to buy or sell crypto.
📤 Transaction fees
Fees paid to transfer crypto.
⛏️ Mining costs
If you mined the crypto.
Record Keeping for Crypto
Good record keeping is essential for crypto. You need to keep:
📋 Transaction history
Details of every buy, sell, and exchange.
📅 Dates
The date of each transaction.
💷 Values
The value in GBP at the time of each transaction.
💸 Fees
Any fees paid.
🔑 Wallet addresses
Your wallet addresses.
You must keep these records for at least 5 years after the 31 January filing deadline.
Reporting and Paying CGT on Crypto
- If you already file a Self Assessment tax return, report the gain in your return by 31 January following the end of the tax year.
- If you don’t normally file a tax return, you can use the Real-Time CGT Service to report and pay without registering for Self Assessment. See our guide: Reporting Capital Gains.
Crypto and Income Tax
If you receive crypto as payment for goods or services, or from mining or airdrops, it may be subject to Income Tax.
Employment
Crypto received as employment income is subject to Income Tax and NIC.
Mining
Crypto from mining may be subject to Income Tax if it’s a trading activity.
Airdrops
Crypto from airdrops may be subject to Income Tax.
For more on Income Tax, see our HMRC Self Assessment Guide.
How We Can Help
Crypto tax can be complex, especially with the volume of transactions and the pooling rules. Our ACCA-qualified accountants can:
- Calculate your CGT and Income Tax liability.
- Apply the crypto pooling rules correctly.
- Help you keep proper records.
- Prepare and file your tax return.
Let us help you manage your crypto tax.
📚 Related Guides
• Capital Gains Tax Guide
• Capital Gains Allowance
• Selling Shares Capital Gains Tax
• Property Capital Gains Tax
• Investors and Capital Gains
• Capital Gains Tax Calculator
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