UK Crypto Tax Guide 2025/26: Everything You Need to Know

Every factual statement below is drawn from HMRC's published guidance on gov.uk and cited to it. The sources are listed in full at the end.

How HMRC Classifies Cryptocurrency

HMRC's position is stated plainly in its Cryptoassets Manual: "HMRC does not consider cryptoassets to be currency or money" (CRYPTO10100).

The manual identifies four kinds of token: exchange tokens, where HMRC's example is bitcoin, utility tokens that give the holder access to particular goods or services, security tokens that give particular rights or interests in a business, and stablecoins, which may be pegged to something considered to have a stable value such as a fiat currency or gold. HMRC is clear that the tax treatment of all types of tokens is "dependent on the nature and use of the token and not the definition of the token" (CRYPTO10100).

For most investors the tokens in question are exchange tokens. HMRC expects that buying and selling tokens by an individual "will normally amount to investment activity (rather than a trade of dealing in tokens)", and that in such cases an individual who invests in tokens "will typically have to pay Capital Gains Tax on any gains they realise" (CRYPTO22050).

When Capital Gains Tax Applies

Capital Gains Tax is triggered by a disposal. HMRC's guidance lists the ways you dispose of cryptoasset tokens as: "selling them", "exchanging them for a different type of cryptoasset", "using them to pay for goods or services", and "giving them to another person", other than gifts to your spouse or civil partner or to charity (Check if you need to pay tax when you sell cryptoassets).

The swap rule catches most people out. Many investors assume that because they have not converted to sterling, they have not realised a profit. HMRC treats exchanging one cryptoasset for a different type as a disposal of the one you gave up, so a gain can arise even though no pounds ever moved.

Two exclusions matter. Gifts to a spouse or civil partner are outside the disposal list, and so are gifts to charity. Moving crypto between wallets you own yourself is not a disposal either: HMRC states there is "no disposal if the individual retains beneficial ownership of the tokens throughout the transaction, for example moving tokens between public addresses that the individual beneficially controls (commonly described as moving tokens between wallets)" (CRYPTO22100). You still need records of the original cost for everything you move, because HMRC states you "must keep your own records of your transactions" (Check if you need to pay tax when you sell cryptoassets).

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CGT Rates and the Annual Exempt Amount

HMRC's published rates and allowances give the annual exempt amount for individuals as "£3,000" for the 2025 to 2026 tax year, and "£3,000" again for 2026 to 2027 (Capital Gains Tax rates and annual tax-free allowances).

For assets other than residential property, the same page gives "18% and 24% for individuals" for the period 6 April 2025 to 5 April 2026, and the same pair of rates for 30 October 2024 to 5 April 2025. For disposals between 6 April 2024 and 29 October 2024 the rates were "10% and 20% for individuals".

Which of the two rates applies depends on your income. HMRC's rates page states that a basic rate taxpayer pays 18% on gains falling within the basic Income Tax band and 24% on gains above it, and that a higher rate taxpayer pays 24% (Capital Gains Tax rates). The basic rate band runs to £50,270 of income (Income Tax rates and Personal Allowances).

Capital losses can reduce your gains. HMRC states that you "do not have to report losses straight away", and that you "can claim up to 4 years after the end of the tax year" (Capital Gains Tax: losses). Where losses bring the gain down to the tax-free allowance, the remaining losses can be carried forward to a future tax year.

Gifts between spouses and civil partners sit outside the disposal list, and each person has their own annual exempt amount. Any planning around that should be done on proper advice.

Calculating Your Gain

The calculation is proceeds minus allowable costs.

HMRC's Cryptoassets Manual lists the allowable costs as "the consideration (in pound sterling) originally paid for the asset", "transaction fees paid for having the transaction included on the distributed ledger", "advertising for a purchaser or a vendor", "professional costs to draw up a contract for the acquisition or disposal of the tokens", and "costs of making a valuation or apportionment to be able to calculate gains or losses" (CRYPTO22150).

The same page sets out what is not allowable: any cost already deducted against profits for Income Tax, mining equipment and electricity, sterling deposited with an exchange, deposits of non-sterling fiat currency, and withdrawals from an exchange.

The difficulty arises when you have bought the same token more than once at different prices. You cannot simply choose which purchase to match against a sale. HMRC applies a pooling method.

HMRC's guidance on pooling states that "Each type of token will need its own pool. For example, if a person owns bitcoin, ether and litecoin they would have three pools and each one would have its own 'pooled allowable cost' associated with it" (CRYPTO22200).

Every buy adds to the pool; every sale draws from it at the average cost.

A brief worked example:

Date	Action	BTC	Cost (£)	Pool total (£)	Pool BTC
Jan 2024	Buy	1.0	30,000	30,000	1.0
Aug 2024	Buy	0.5	18,000	48,000	1.5

Average cost per BTC: £48,000 ÷ 1.5 = £32,000

You then sell 0.5 BTC in February 2025 for £22,000:

Allowable cost: 0.5 × £32,000 = £16,000
Gain: £22,000 − £16,000 = £6,000

After the sale, the pool holds 1.0 BTC at a total cost of £32,000.

The same page notes one exception to pooling: "Non-Fungible Tokens (NFTs) are separately identifiable and so are not pooled and no matching rules are applied" (CRYPTO22200).

The Same-Day and 30-Day Rules

Two matching rules run before the pool calculation. HMRC applies the same day rule under TCGA1992/S105 and the 30 day rule under TCGA1992/S106A, and states that where an individual "disposes of tokens and then acquires, in the same capacity, tokens of the same type within the next 30 days", the same day rule is applied first and the 30 day acquisitions are then matched against the earlier disposal instead of going into the pool (CRYPTO22200).

When You Must Report to HMRC

There are two separate rules, and they are often run together incorrectly.

The first is the trigger for reporting a gain at all. HMRC states you must report and pay Capital Gains Tax when "your total gain for the tax year (6 April to 5 April) is above the Capital Gains Tax tax-free allowance" (Check if you need to pay tax when you sell cryptoassets). For 2025/26 that allowance is £3,000.

The second applies only if you are already in Self Assessment. HMRC states: "If you're registered for Self Assessment, you need to report your gains in your tax return if the total amount you sold the assets for was more than: £50,000 - for the tax year 2023 to 2024 onwards" (Work out if you need to pay Capital Gains Tax). That is a reporting requirement inside a return you are already filing, not a separate reason to register.

If you are below the allowance and not in Self Assessment for any other reason, keep your records anyway.

How to Report: Self Assessment

HMRC gives two routes for reporting crypto gains: "completing a Self Assessment tax return at the end of the tax year" or "using the Capital Gains Tax real time service". Where the gain is reported on a Self Assessment return, HMRC says it should be completed in pound sterling, in the cryptoasset section, which is "available on returns for the tax year 2024 to 2025 onwards" (Check if you need to pay tax when you sell cryptoassets).

HMRC's record-keeping list for cryptoassets covers the type of token, the date of disposal, the number of tokens disposed of, the number remaining, the value in pound sterling, bank statements, and the pooled costs before and after the disposal (Check if you need to pay tax when you sell cryptoassets). Keep a full computation on file even though you do not send it in with the return.

You register for Self Assessment at gov.uk/register-for-self-assessment. HMRC's deadlines page states you "must tell HMRC by 5 October if you need to complete a tax return for the previous year", that HMRC "must receive your paper tax return by 11:59pm on 31 October 2026", and that you "must submit your online tax return by 11:59pm on 31 January 2027" for the tax year that "started on 6 April 2025 and ended on 5 April 2026" (Self Assessment tax returns: deadlines).

HMRC's Cryptoasset Reporting Framework (CARF)

The first period the Cryptoasset Reporting Framework covers is the 2026 calendar year, beginning 1 January 2026. HMRC's guidance for cryptoasset service providers states that providers must "submit your first report between 1 January 2027 and 31 May 2027, giving details for 1 January 2026 to 31 December 2026" (Reporting cryptoasset user and transaction data).

Reporting covers "users who are tax resident in the UK or another country that is signed up to CARF rules" (Reporting cryptoasset user and transaction data), so holdings on exchanges in participating countries come into scope as well.

If there is a gap between what your exchange reports and what appears on your Self Assessment return, HMRC will have the information to spot it. Our CARF guide covers the detail.

Penalties for Undeclared Tax

Penalties are charged as a percentage of the unpaid tax, not of the gain. The percentage depends on the behaviour behind the error and on the kind of disclosure you made. HMRC calls it an unprompted disclosure if you tell it about an inaccuracy "before you have any reason to believe that we've discovered, or about to discover it", and a prompted disclosure if you tell it "at any other time" (CC/FS7A).

HMRC's factsheet is explicit on reasonable care: "If you took reasonable care to get things right but your return or document still contained an inaccuracy, we won't charge you a penalty" (CC/FS7A).

Behaviour	Unprompted disclosure	Prompted disclosure
Reasonable care taken	No penalty	No penalty
Careless	0% to 30%	15% to 30%
Deliberate	20% to 70%	35% to 70%
Deliberate and concealed	30% to 100%	50% to 100%

Every figure in that table is quoted from HMRC factsheet CC/FS7A, and the same maximums and minimums appear in the Compliance Handbook at CH82470.

Where you never told HMRC you needed to file at all, the failure to notify rules apply instead. The deliberate rows are the same. The non-deliberate row turns on timing: "0% to 30%" for an unprompted disclosure within 12 months of the tax being due, "10% to 30%" for an unprompted disclosure after 12 months or a prompted disclosure within 12 months, and "20% to 30%" for a prompted disclosure more than 12 months late. HMRC will not charge a failure to notify penalty where all three of the following apply: "you have a reasonable excuse for the failure", "the failure wasn't deliberate", and "you told us without unreasonable delay after your reasonable excuse ended" (CC/FS11).

Where the unpaid tax involves an offshore matter, the maximum rises with how readily the territory shares information with HMRC. HMRC's offshore factsheet gives the maximums by territory category: category 1, "The maximum penalty is 100% of the tax"; category 2, "The maximum penalty is 150% of the tax"; category 3, "The maximum penalty is 200% of the tax" (CC/FS17).

Interest is charged on tax paid late, separately from any penalty (Self Assessment tax returns: penalties).

The gap between a prompted and an unprompted disclosure is the difference between the two columns above. If you have years of unreported gains, see our guide on what to do if you receive an HMRC crypto letter for how the disclosure process works.

Crypto Tax Software

Several tools, Koinly and Recap among them, can compile transaction histories across exchanges and wallets and produce a UK-format capital gains report. We do not endorse or recommend any tool, and figures produced by software still need checking against your own records.

This guide is for general information only and does not constitute tax advice. Tax rules change and individual circumstances vary. Always consult a qualified tax adviser before making decisions about your tax position. Nothing on this website creates a professional relationship.

Sources

Last reviewed: 30 July 2026.

Every tax figure and rule above is taken from the following HMRC and gov.uk pages:

Quoted HMRC material contains public sector information licensed under the Open Government Licence v3.0.

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