Bitcoin Cash (BCH) Tax UK: The Hard Fork Cost-Basis Rule Explained
How HMRC taxes Bitcoin Cash in the UK — Capital Gains Tax on BCH disposals, and the hard-fork rule that splits your original Bitcoin cost between BTC and BCH.
Bitcoin Cash is unusual because most UK holders never bought it — they received it. BCH was created in August 2017 when Bitcoin hard-forked, and anyone holding BTC at the time was credited with an equal amount of BCH. That origin story is exactly what makes its tax treatment catch people out.
The hard-fork cost-basis rule
When a blockchain splits, HMRC does not treat the new coins as free with a zero cost. Instead, your original cost basis in the pre-fork asset is divided between the old and new coins on a "just and reasonable" basis — usually by reference to their market values shortly after the fork. So if you held Bitcoin in August 2017, part of your original BTC pool cost transfers into a new Section 104 pool for BCH. Getting this apportionment right matters: too low a BCH cost basis and you overpay tax when you sell.
Disposals: Capital Gains Tax
Selling BCH for GBP, swapping it for BTC or any other token, or spending it is a disposal. Your gain is the proceeds minus the apportioned pooled cost, after the same-day and 30-day rules. Gains above the £3,000 annual exempt amount are taxed at 18% or 24% depending on your income band.
No staking, but watch mining
Bitcoin Cash is a proof-of-work chain, so there are no staking rewards. If you mine BCH, the coins are income at their GBP value when received — taxed as either miscellaneous or trading income depending on the scale and organisation of your activity — and that value becomes their cost basis.
Why records are the hard part
Because so much BCH was acquired through the 2017 fork (and later the 2018 Bitcoin SV split, which divided BCH again), holders often have no purchase record at all. HMRC still expects a defensible cost basis. Dig out your BTC holdings as at 1 August 2017, apply a reasonable apportionment, and keep your working.
CryptoLens applies UK Section 104 pooling and the same-day and 30-day rules automatically, so you can enter your BCH disposals and get an HMRC-ready figure without rebuilding the maths by hand.
This is general information, not personal tax advice.
Frequently asked questions
Do I have a cost basis for Bitcoin Cash I received in the 2017 fork?
Yes. HMRC splits your original Bitcoin cost basis between BTC and BCH on a just-and-reasonable basis, usually by their values just after the fork. The BCH share is your cost when you later sell.
Is selling Bitcoin Cash taxable in the UK?
Yes. Selling, swapping or spending BCH is a Capital Gains Tax disposal. Net gains above your £3,000 annual exempt amount are taxed at 18% or 24%.
Calculate your BCH tax
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