Memecoin Trading Tax UK: PEPE, WIF, BONK and the Section 104 Problem

Memecoin trading is, on average, the worst-documented activity in UK crypto. Hundreds of micro-disposals across Solana and Base, dozens of new tokens a week, and exchange CSVs that fail to capture half of it. The tax bill is real even if the gains are tiny, because under-reporting still triggers HMRC penalties.

Are memecoins taxed differently?

No. PEPE, WIF, BONK, FLOKI, MOG, and every new launch are taxed exactly like Bitcoin: as cryptoassets subject to Capital Gains Tax on disposal, with Section 104 pooling. There is no special memecoin rule and no de minimis exemption. The tax treatment also does not depend on market cap, whether the token has utility, or how serious the project is — HMRC sees a token as a token.

Why memecoin traders under-report

Memecoin trading produces a particular shape of records that breaks most tax tools: dozens of tokens that no major price feed covers, swaps routed through Jupiter or 1inch with multi-hop paths, frequent rugged or migrated tokens whose contract address changes, and hundreds of small disposals where a £20 swap nets a £3 gain. Manually pricing each event in GBP at the moment of execution is impractical.

Common shortcuts that fail under HMRC scrutiny: ignoring tokens that are now worthless (the disposal still happened — you must record it, even if your acquisition cost equals your proceeds and the gain is zero), netting positions and reporting only year-end balances (HMRC requires per-disposal reporting), or using the exchange's "P&L" number (those are typically wrong because they ignore Section 104 pooling and use FIFO).

Same-day rule on memecoin churn

Memecoin trading frequently triggers the same-day rule. If you buy and sell the same token on the same day, those transactions are matched against each other before touching the pool. This usually reduces your effective gain because the matched buy and sell cancel out, but it also produces a flurry of small numbers that have to be reported individually.

Worthless tokens and negligible value claims

If a memecoin you bought is now genuinely worthless (zero liquidity, contract paused, dev rugged), you can make a "negligible value claim" under TCGA 1992 s24. This treats the token as if you had disposed of it for its current (zero or near-zero) value, crystallising the loss. You can then carry the loss forward against future gains. The claim must be made on your Self Assessment in the year you make the claim — HMRC does not back-date.

Solana memecoin specifics

Solana memecoin trading produces a particular reporting headache because Jupiter routes through multiple liquidity pools per swap. From HMRC's perspective there is still only one disposal (your input token) and one acquisition (your output token), regardless of how many pools the router used. Tools that account for every internal hop as a separate event will over-report your transaction count.

What HMRC will accept

HMRC expects, for each disposal: the date, the input token symbol and contract address, the output token symbol and contract address, the input GBP value at execution, the output GBP value at execution, your Section 104 pool cost basis on the input, and the resulting gain or loss. Rolling that up across hundreds of memecoin trades is the kind of work CryptoLens automates — by scanning your wallet and tagging every swap with the historical GBP price for the exact block timestamp.