HMRC Cryptoassets Tax Rules 2026: CGT, Income Tax & Section 104
UK tax treatment of cryptoassets for individuals, including Capital Gains Tax on investment disposals, Income Tax on staking, mining and certain other receipts, and HMRC's same-day, 30-day and Section 104 matching rules.
Key Statutory Takeaways
Statutory Rules & Core Thresholds
Annual Exempt Amount: £3,000 for 2026/27. CGT Rates: 18% (basic-rate band) and 24% (higher-rate band).
In-Depth Legal Framework & Analysis
HMRC treats exchange tokens held as investments by individuals as subject to Capital Gains Tax upon disposal. Disposals include fiat sales, token swaps, purchasing goods/services, or gifting. Allowable acquisition costs must be determined using the statutory matching sequence: same-day transactions, 30-day bed-and-breakfast acquisitions, and then Section 104 pooling. Tokens received from staking or mining are taxable as miscellaneous income when received (unless trading rules apply), establishing a base cost for future CGT disposals.
Self Assessment Capital Gains pages (SA108) due 31 January. First CARF provider information reports due by 31 May 2027.
CGT or Income Tax?
HMRC says individuals holding exchange tokens as investments will, in the vast majority of cases, pay Capital Gains Tax when they dispose of them.
If staking does not amount to a trade, token rewards are generally taxable as miscellaneous income based on their sterling value when received.
If mining amounts to a trade, the profits are taxed as trading income. If it does not, the token value received is generally miscellaneous income.
Income from lending and certain DeFi activities can be taxable as income; the exact treatment depends on the arrangement.
Cryptoassets received from employment can be taxable as employment income and may also attract National Insurance.
What Counts as a Crypto Disposal?
- Selling cryptoassets for pounds or another fiat currency.
- Exchanging one type of cryptoasset for another.
- Using cryptoassets to buy goods or services.
- Giving cryptoassets to another person, unless the gift is to a spouse or civil partner.
- Buying cryptoassets with pounds.
- Moving tokens between wallets or addresses that the individual beneficially controls.
- Certain transfers where beneficial ownership remains with the same person.
Crypto Capital Gains Tax 2026/27
Annual Exempt Amount: £3,000- Calculate the gain or loss on each disposal.
- Apply the crypto matching rules to determine the allowable acquisition cost.
- Offset allowable capital losses under the CGT rules.
- Deduct the £3,000 Annual Exempt Amount where available.
- Apply the 18%/24% rates according to taxable income and gain.
Cryptoasset Matching Rules
Tokens of the same type acquired and disposed of on the same day are matched first.
Tokens of the same type acquired within the following 30 days are then matched to the earlier disposal, subject to the statutory conditions.
Remaining tokens are generally matched against the individual's Section 104 pool where the statutory pooling rules apply.
Section 104 Crypto Pooling
Where tokens are of a nature to be dealt in without identifying the particular tokens disposed of or acquired, they can fall within Section 104 pooling.
Scenario: An individual buys 1 ETH for £2,000, sells it for £3,500 and then buys ETH again within the following 30 days.
Rule: The later ETH acquisition can be matched to the earlier disposal under the 30-day rule rather than simply using the Section 104 pool.
Result: The allowable acquisition cost for the disposal must therefore be calculated using the statutory matching order.
Staking and Mining
Non-Trade: Where staking is not a trade, the sterling value of tokens awarded is generally taxable as miscellaneous income when received.
Trade: If the activity amounts to a trade, the receipts are treated under the trading-income rules.
Subsequent Disposal: A later disposal can trigger CGT on any increase or decrease in value after the tokens were acquired for Income Tax purposes.
Non-Trade: Where mining is not a trade, the sterling value of tokens awarded is generally miscellaneous income when received, less appropriate allowable expenses.
Trade: Where the activity constitutes a trade, taxable trading profits are calculated under the relevant rules.
Subsequent Disposal: Tokens retained after being taxed as mining income can give rise to CGT when later disposed of.
Reporting Crypto Gains and Income
Form: SA108 where Capital Gains Tax is reported through Self Assessment.
Deadline: The normal online Self Assessment deadline is 31 January following the end of the tax year.
Crypto income that requires Self Assessment reporting is included in the appropriate income sections of the tax return rather than being treated automatically as CGT.
🌐 Crypto-Asset Reporting Framework (CARF)
Effective: 1 January 2026UK cryptoasset service providers within the CARF rules must undertake due diligence and report specified information on reportable cryptoasset users and transactions.
Obligation: CARF reporting is an information-reporting regime for cryptoasset service providers. It does not replace the taxpayer's obligation to calculate and report UK tax.
Crypto Tax Compliance Penalties
Crypto Tax Compliance Penalties
🧮 Crypto Matching Example
Scenario: An individual buys 1 ETH for £2,000, sells it for £3,500 and then buys ETH again within the following 30 days.
Tax Payable: The allowable acquisition cost for the disposal must therefore be calculated using the statutory matching order.
Frequently Asked Questions: HMRC Cryptoassets Tax Rules 2026: CGT, Income Tax & Section 104
International Money Transfer & FX Rates
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Primary Statutory Authority
Frequently Asked Questions
Yes. HMRC treats exchanging one type of cryptoasset for another as a disposal for Capital Gains Tax purposes. The sterling market value of the tokens received is used to determine the disposal proceeds.
It depends on the activity. Where staking does not amount to a trade, HMRC generally treats the sterling value of tokens received as miscellaneous income when received. If the staking activity amounts to a trade, the receipts are dealt with under the trading-income rules. A later disposal can also create a separate CGT calculation.
When calculating the allowable cost of a crypto disposal, acquisitions of the same token type are first matched under the same-day rule. Acquisitions made within the following 30 days are then matched under the 30-day rule, before remaining tokens are generally matched against the Section 104 pool.
Generally no, provided you retain beneficial ownership throughout the transfer. Moving tokens between wallets or addresses that you beneficially control is normally not a CGT disposal.
A gift of crypto to another person is generally treated as a disposal at market value for CGT purposes. Transfers between spouses or civil partners who are living together are generally treated on a no-gain/no-loss basis, subject to the statutory exceptions. Gifts to charity can also receive special CGT treatment.
The UK introduced CARF reporting from 1 January 2026. In-scope cryptoasset service providers must collect and report specified information, with the first reportable period running from 1 January to 31 December 2026 and reports due by 31 May 2027. This does not mean every transaction is automatically reported under a single CRS rule, and it does not replace the taxpayer's own reporting obligations.
Common Taxpayer Misconceptions
✓ Rule: For 2026/27, the individual Annual Exempt Amount is £3,000, and gains above this are taxed at 18% (basic rate) or 24% (higher rate).
✓ Rule: If not a trade, rewards are miscellaneous income at GBP value when received, and any subsequent sale is subject to Capital Gains Tax.
✓ Rule: Transfers between spouses or civil partners living together generally qualify for no-gain/no-loss treatment.
✓ Rule: Transfers between wallets or addresses that you beneficially control are not disposals for CGT purposes.
✓ Rule: UK CARF reporting begins from 1 January 2026 for in-scope providers, with the first reports due by 31 May 2027, and penalties are determined by taxpayer behaviour.