Crypto Tax in the UK: A Beginner's Guide for 2026/27
Buying crypto isn't taxed. Making a gain when you sell, swap or spend it usually is. Here's how UK crypto tax works for a beginner, with the numbers worked out in pounds.
- Taxed when you dispose: selling for pounds, swapping for another coin, spending it or gifting it (except to a spouse or civil partner).
- Tax-free allowance: £3,000 of gains a year (2026/27), across everything you own.
- Rates: 18% within your basic-rate band, 24% above it.
- HMRC can see it: since 1 January 2026 UK platforms report your transactions.
What counts as a "disposal"
Capital Gains Tax is charged when you dispose of a crypto asset. For most beginners that means any of these:
- Selling crypto for pounds or another currency.
- Swapping one coin for another, for example Bitcoin for Ethereum or a stablecoin. This catches a lot of beginners out.
- Spending crypto on goods or services.
- Giving it away, unless it's to your spouse or civil partner.
Moving coins between your own wallets isn't a disposal. Neither is just holding while the price goes up or down.
Income, not gains: staking, mining and pay
Some crypto counts as income instead, which is taxed under Income Tax. That usually includes coins you're paid for work, mining rewards and most staking rewards. If you later sell those coins, any rise in value after you received them is a capital gain. This guide focuses on trading, which is mostly Capital Gains Tax.
The allowance and the rates for 2026/27
| 2026/27 | |
|---|---|
| Annual exempt amount (tax-free gains) | £3,000 |
| Rate on gains in your basic-rate band | 18% |
| Rate on gains above it (and for higher-rate taxpayers) | 24% |
The allowance covers all your capital gains in the tax year (6 April to 5 April), not just crypto. Your gains are added on top of your income to work out which rate applies, so a basic-rate taxpayer can pay a mix of 18% and 24%.
How to work out a gain
Gain = what you sold for − what it cost − allowable fees
UK rules don't let you pick which coins you sold. If you've bought the same coin several times, you normally use the average cost of everything you hold, called the section 104 pool. There's a separate pool for each coin.
Example 1: one sale under the allowance
You buy 0.1 BTC for £5,000 and pay a £25 fee. Your pool cost is £5,025.
Later you sell half (0.05 BTC) for £4,000 and pay a £20 fee.
Cost of the half you sold: £5,025 ÷ 2 = £2,512.50.
Gain: £4,000 − £20 − £2,512.50 = £1,467.50. That's under the £3,000 allowance, so no tax if it's your only gain this year.
Example 2: a bigger year
Your total gains for the year come to £8,000. Take off the £3,000 allowance and £5,000 is taxable.
If all of it falls within your basic-rate band: £5,000 × 18% = £900.
If you're a higher-rate taxpayer: £5,000 × 24% = £1,200.
Two matching rules come before the pool. Coins bought on the same day as a sale are matched first. Then coins bought in the 30 days after a sale are matched to it. That stops people selling at a loss and buying straight back just to create a tax loss.
Losses are worth recording
If you sell for less than your cost, that's a capital loss. Report it to HMRC and you can set it against gains in the same year or carry it forward to future years. You generally have 4 years from the end of the tax year to claim a loss. Most beginners lose money at first, so this matters.
When and how to tell HMRC
- Over the allowance: report the gain and pay the tax, either through a Self Assessment tax return or HMRC's real-time Capital Gains Tax service (by 31 December after the tax year ends), if you're eligible to use it.
- Big totals: if you're registered for Self Assessment, report if the total you sold for was more than £50,000, even if your gain is under £3,000.
- Self Assessment deadline: for 2026/27, online returns and payment are due by 31 January 2028.
HMRC now gets data from exchanges
Since 1 January 2026, UK crypto platforms have had to collect each user's name, date of birth, address and National Insurance number or Unique Taxpayer Reference, and report their transactions to HMRC under the Cryptoasset Reporting Framework. Users who don't provide the details, or give wrong ones, can face a penalty of up to £300. The first reports, covering 2026, go to HMRC by 31 May 2027.
In practice: assume HMRC will see your trades, and keep your own records so your numbers match.
What records to keep
For every buy, sell, swap and transfer, note:
- the date and the coin
- how much you bought or sold
- the value in pounds at the time
- any fees
- your running pool total for each coin
Exchanges let you download your history, but download it regularly in case an account closes. Our trading journal lesson shows a simple way to log every trade.
This guide is general education, not tax advice. Your situation may be different, so check HMRC's crypto guidance and the Capital Gains Tax rates, or speak to an accountant. More on the wider rules in is crypto trading legal in the UK.
Questions people ask
Do I pay tax on crypto in the UK?
Usually, if you make a gain when you sell, swap or spend it. Most individuals pay Capital Gains Tax on crypto gains above the £3,000 annual allowance (2026/27). Just buying and holding crypto isn't taxed.
Is swapping one crypto for another taxable in the UK?
Yes. Swapping Bitcoin for Ethereum counts as disposing of the Bitcoin, so you work out a gain or loss in pounds even though you never cashed out.
What is the crypto tax rate in the UK?
For gains from 6 April 2026, Capital Gains Tax is 18% on gains that fall within your basic-rate band and 24% above it. Higher and additional rate taxpayers pay 24%.
Do I need to tell HMRC if my gains are under £3,000?
Not always. If you're registered for Self Assessment, you still need to report if the total you sold for in the tax year was more than £50,000, even if your gain is under the allowance. Reporting losses can also help you later.
Does HMRC know about my crypto?
Increasingly, yes. Since 1 January 2026, UK crypto platforms collect users' details, including a National Insurance number or tax reference, and report their transactions to HMRC under the Cryptoasset Reporting Framework.
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