Written by the TaxTune Editorial Team·Reviewed by our qualified accountants·Updated June 2026

When crypto is subject to Capital Gains Tax

For most people, crypto is treated like an investment asset. That means Capital Gains Tax, or CGT, usually applies when you make a disposal. A disposal is wider than just cashing out to pounds. You make a disposal when you sell crypto, when you swap one token for another, and when you spend crypto to buy goods or services. Even gifting crypto to someone other than your spouse or civil partner can count.

The gain is the difference between what you receive on disposal and the cost of acquiring what you disposed of. If a disposal produces a gain above your allowances, CGT is due. If you simply buy and hold crypto without disposing of it, there is generally no CGT to pay until you do something with it. For the wider picture, see our guide to Capital Gains Tax explained.

The £3,000 allowance and CGT rates

Everyone has an annual exempt amount for capital gains. For the 2026/27 tax year this is £3,000. You only pay CGT on total gains above this figure across all your chargeable assets in the year, not just crypto.

The rate you pay depends on your income. Gains that fall within your remaining basic rate band are taxed at 18 percent, and gains above the basic rate band are taxed at 24 percent. To work out which applies, you add your taxable gains on top of your income for the year. The split between the two rates can mean part of a single gain is taxed at 18 percent and part at 24 percent.

Because the rules treat token pools and matching in a particular way, calculating crypto gains is rarely as simple as one purchase and one sale. The principles are similar to other investments, and our guide to Capital Gains Tax on shares shows how pooling and gains work in practice.

A worked example

Worked example

Selling crypto at a gain

Daniel bought crypto over time for a total cost of £10,000. During the 2026/27 tax year he sells part of his holding for £17,000. The cost attributable to what he sold is £6,000, so his gain is £17,000 less £6,000, which is £11,000.

He has no other capital gains in the year, so he applies the £3,000 annual exempt amount. That leaves a taxable gain of £8,000. Daniel is a higher rate taxpayer, so the whole gain sits above his basic rate band and is taxed at 24 percent, giving CGT of £1,920.

If Daniel had instead been a basic rate taxpayer with room in his basic rate band, some or all of the £8,000 could have been taxed at 18 percent rather than 24 percent. Either way he must report the gain to HMRC and keep the records that show how he reached these figures.

This is a simplified example. Real calculations must follow HMRC pooling rules, which is why accurate records of every transaction are so important.

When crypto is treated as income

Not all crypto is taxed under CGT. Crypto you receive in certain ways is usually treated as income and taxed accordingly, separately from any later capital gain. This typically includes the following.

  • Mining rewards. Crypto earned from mining is usually income at the time you receive it.
  • Staking rewards. Crypto earned from staking is generally treated as income.
  • Crypto received as payment. If you are paid in crypto for work or services, that is income, valued in pounds at the time you receive it.

Where crypto is income, it is taxed alongside your other income against your personal allowance and the usual rates. Importantly, the value at the date you received it then becomes the cost for any future CGT calculation when you later sell, swap or spend it. So a coin earned from staking can be taxed once as income on receipt and again as a capital gain on disposal if its value has risen.

Records and HMRC data

Good records are essential with crypto, and not optional. For every transaction you should keep the type of token, the date, what you did, the value in pounds at the time, the amount of crypto involved, the running cost of your pools, and any fees. Without these you cannot work out gains correctly or prove your figures if asked.

This matters even more because HMRC receives data from crypto exchanges. That means your activity is increasingly visible, and undeclared gains or income are more likely to be picked up. Some people receive letters prompting them to check their position, which we cover in our guide to the HMRC nudge letter. Keeping clean records from the start is the best protection.

Common mistakes

Crypto throws up some traps that catch people out.

  • Thinking only cashing out is taxable. Swapping one token for another and spending crypto are also disposals for CGT.
  • Ignoring income events. Mining, staking and being paid in crypto are usually income, taxed on receipt.
  • Forgetting the double layer. Crypto taxed as income on receipt can still produce a capital gain when later disposed of.
  • Missing the allowance detail. The £3,000 exempt amount covers all gains in the year, not just crypto.
  • Poor records. Without full transaction history you cannot calculate or defend your figures.
  • Assuming exchanges are private. HMRC receives data from exchanges.

What you should do

Start by gathering a complete history of your crypto transactions, including buys, sells, swaps, spends and any rewards received. Separate the events that are income, such as mining and staking, from the disposals that fall under CGT. Work out your gains after the £3,000 annual exempt amount and apply the 18 percent and 24 percent rates according to your income.

If your gains or income need reporting, make sure they go on your tax return and keep every record that supports them. Crypto tax can get complex quickly, especially with frequent trading, so if you are unsure, get advice before a deadline or a letter arrives. You can start your quote and we will help you get it right.

In short

A practical guide to how crypto is taxed in the UK, covering Capital Gains Tax, income tax and the records you need.

Frequently asked questions

Do I pay tax on crypto in the UK?
Often, yes. Crypto is usually subject to Capital Gains Tax when you sell, swap or spend it, with tax due on gains above the £3,000 annual exempt amount. Crypto received from mining, staking or as payment is usually treated as income and taxed when you receive it.
How much crypto can I sell tax free?
You can make total capital gains of up to £3,000 in the 2026/27 tax year before Capital Gains Tax applies. This annual exempt amount covers all your chargeable gains for the year, not just crypto, so other disposals use up the same allowance.
What are the CGT rates on crypto?
Gains that fall within your remaining basic rate band are taxed at 18 percent, and gains above the basic rate band are taxed at 24 percent. You add your taxable gains on top of your income to decide which rate applies, so a single gain can be split across both rates.
Is swapping one crypto for another taxable?
Yes. Swapping one token for another is a disposal for Capital Gains Tax purposes, even though you never converted to pounds. You work out the gain using the pound value at the time of the swap, so swaps need to be recorded just like sales.
How is staking and mining crypto taxed?
Crypto received from mining or staking is usually treated as income and taxed at the time you receive it, based on its pound value then. That value also becomes the cost for any future Capital Gains Tax calculation when you later sell, swap or spend those coins.
Does HMRC know about my crypto?
Increasingly, yes. HMRC receives data from crypto exchanges, so your activity is more visible than before and undeclared gains or income are more likely to be noticed. Some people receive nudge letters asking them to check their position, so keeping good records is wise.
What records do I need for crypto tax?
You should keep a full history of every transaction, including the token type, date, what you did, the amount of crypto, the value in pounds at the time, your pooled costs and any fees. Without these records you cannot calculate gains correctly or prove your figures to HMRC.