📋 Table of Contents
1. What is Crypto CGT in the UK?
In the United Kingdom, cryptocurrencies such as Bitcoin are classified as property, not as currency or money. This is HMRC's longstanding position, formally set out in its Cryptoassets Manual. As a result, when you make a profit from crypto, you are subject to Capital Gains Tax (CGT) — the same tax that applies to gains on shares, second properties, and other capital assets.
CGT is not charged on your total crypto holdings but only on your net gains in a given tax year (6 April to 5 April). If you make losses, these can be offset against gains in the same year or carried forward to future years — but you must report them to HMRC to claim them.
Income tax (rather than CGT) may apply in specific circumstances: if you receive crypto as employment income, through mining, staking rewards treated as income, or as payment for services. For most retail investors buying and selling crypto, CGT is the relevant tax.
2. CGT Allowance & Tax Rates 2026
Every UK resident individual has an annual CGT allowance — the amount of gains you can make tax-free in a single tax year. For both the 2025-26 and 2026-27 tax years, this allowance is £3,000.
Once your gains exceed the £3,000 allowance, the tax rate that applies depends on your total taxable income for the year:
| Taxpayer Band | Income + Gains Threshold | CGT Rate on Crypto |
|---|---|---|
| Basic rate taxpayer | Income + gains below £50,270 | 18% |
| Higher/additional rate taxpayer | Income + gains above £50,270 | 24% |
Note: The £50,270 threshold includes both your income and your taxable gains. If your income is £45,000 and your taxable gains are £10,000, the first £5,270 of gains is taxed at 18% and the remaining £4,730 at 24%.
Married couples and civil partners each have their own £3,000 allowance. Transferring assets between spouses before disposal is a legitimate planning strategy that does not trigger CGT.
3. What Counts as a Taxable Disposal?
HMRC's definition of a "disposal" is broader than most people expect. A taxable disposal occurs in all of the following situations:
- Selling crypto for fiat currency (GBP, USD, EUR, etc.)
- Trading one crypto for another — swapping Bitcoin for Ethereum, for example, is treated as selling BTC at its GBP market value and buying ETH. Both sides of the trade are taxable events.
- Spending crypto on goods or services — paying for a product with Bitcoin triggers a disposal at the GBP value of the goods/services received.
- Gifting crypto to another person (other than your spouse or civil partner). The disposal is treated as if you sold at the asset's market value on the date of gift.
What is NOT a taxable disposal
- Buying crypto with fiat currency (GBP)
- Holding crypto — there is no annual wealth tax on holdings
- Moving crypto between your own wallets (same beneficial owner, different addresses)
- Transferring crypto to your spouse or civil partner
4. Share Identification Rules (Section 104 Pool)
When you hold crypto purchased at different times and different prices, you need rules to determine which coins you are selling and at what cost. HMRC applies the same share identification rules used for shares — in a specific order of priority:
Rule 1: Same-Day Rule
If you buy and sell the same cryptoasset on the same day, those purchases are matched to that day's sales first, regardless of what else is in your pool. This prevents "bed and breakfasting" on the same day.
Rule 2: Bed & Breakfast Rule (30-Day Rule)
If you sell a cryptoasset and buy the same asset within 30 days of the sale, the acquisition is matched to the disposal — not the pool cost. This prevents you from realising a loss by selling and immediately re-buying. The rule applies in chronological order of acquisition within the 30-day window.
Rule 3: Section 104 Pool (Average Cost)
All remaining purchases that do not fall under Rules 1 or 2 are added to a single Section 104 pool. The pool tracks the total number of coins and the total cost basis of all those coins. The allowable cost of each disposal is calculated as:
After each disposal, the number of coins and total pool cost are reduced accordingly. New purchases are simply added to the pool at their acquisition cost.
5. CARF: HMRC Now Gets Your Data Automatically
From 1 January 2026, the UK has implemented the Crypto-Asset Reporting Framework (CARF), developed by the OECD and adopted by over 60 countries. Under CARF, all UK-registered crypto exchanges and brokers are legally required to collect and automatically report user data to HMRC every year.
The data reported includes:
- Full name and date of birth
- National Insurance (NI) number
- Residential address
- Wallet addresses associated with your account
- Full transaction history: amounts, dates, values in GBP
- Fiat deposits and withdrawals
CARF works alongside the Common Reporting Standard (CRS) for traditional financial accounts. Data is also shared between participating countries, meaning HMRC may receive data from exchanges based abroad that you use to transact. The era of anonymous crypto investing in the UK is effectively over.
6. How to Report and Pay
Crypto gains in the UK are reported through Self Assessment — HMRC's annual tax return system. If you are not already registered for Self Assessment, you must register by 5 October following the end of the tax year in which you made gains.
Key deadlines
| Action | Deadline |
|---|---|
| Register for Self Assessment (new users) | 5 October (after tax year end) |
| Paper tax return | 31 October (after tax year end) |
| Online tax return & payment | 31 January (following tax year end) |
When do you NOT need to report?
You do not need to report your crypto gains if both of the following apply:
- Your total taxable gains (after deducting losses) are below the £3,000 annual CGT allowance, AND
- Your total proceeds from all disposals in the tax year are below £50,000
If either threshold is exceeded, you must complete a Self Assessment return even if no tax is owed. You can use HMRC's online checker and its Cryptoassets Manual for detailed guidance.
Recommended crypto tax software for UK investors
Calculating Section 104 pool costs manually across hundreds of transactions is error-prone. Dedicated crypto tax tools such as Koinly, CoinTracker, Accointing, and TaxBit support UK tax rules including the same-day, 30-day, and Section 104 pool methods, and can export a ready-to-use CGT summary for your Self Assessment return.
7. Best Exchanges for UK Investors in 2026
Choosing a regulated exchange is especially important in the UK given CARF reporting — you want an exchange that provides reliable transaction histories for your tax calculations. The following exchanges are among the best exchanges in 2026 for UK residents:
FCA registered. 0% fee on GBP bank transfers. Detailed transaction history exports. Suitable for active traders and long-term holders alike.
FCA registered. Beginner-friendly interface with built-in tax reports. Supports GBP deposits and withdrawals via Faster Payments.
MiCA regulated in the EU. Wide range of altcoins. Suitable for experienced traders seeking deeper markets.
For a full comparison of fees, features, and security ratings, see our exchange reviews and the best exchanges in 2026 guide. Always verify that any exchange you use is registered with the FCA for UK anti-money laundering compliance.
Compare the Best UK Crypto Exchanges
Find the right exchange for your needs — from beginner-friendly platforms to advanced trading environments. All FCA-registered options compared.
Compare Exchanges → Best Exchanges 2026 →8. FAQ — Crypto CGT UK 2026
Does HMRC know about my crypto?
Yes. From 1 January 2026, all exchanges operating in the UK are required to automatically report user transaction data to HMRC under CARF (Crypto-Asset Reporting Framework). This includes your name, National Insurance number, wallet addresses, and full transaction history. HMRC has also been receiving data from major exchanges since 2020 via separate data-sharing agreements. Assuming HMRC does not know about your crypto is no longer a safe assumption.
Do I pay tax if I just swap one crypto for another?
Yes. In the UK, exchanging one cryptocurrency for another — for example, swapping Bitcoin for Ethereum — is treated as a disposal for CGT purposes. You are deemed to have sold the first asset at its GBP market value at the time of the swap. Any gain above your CGT allowance is taxable. There is no crypto-to-crypto exemption in UK tax law.
Is Bitcoin a currency for tax purposes in the UK?
No. HMRC does not treat Bitcoin or any other cryptocurrency as currency or money. HMRC's official position is that cryptoassets are a form of property — the same category as shares and real estate. This means capital gains tax applies to most investment gains, using the share identification rules (Section 104 pool) rather than foreign currency rules.
What records should I keep for crypto tax in the UK?
HMRC requires you to keep: the date of each transaction, the type and amount of cryptoasset involved, the value in GBP at the time of the transaction (based on a consistent and reasonable exchange rate), any fees paid (which may be deductible as acquisition or disposal costs), and your running Section 104 pool totals. Records must be kept for at least 5 years after the relevant Self Assessment filing deadline.