UK Crypto Tax 2025/26: The Complete Step-by-Step Guide

1. Key dates & thresholds for 2025/26

From 1 January 2026 the UK is implementing the OECD Crypto-Asset Reporting Framework (CARF). UK exchanges have to report your activity to HMRC from 2027. Translation: the old “HMRC won’t notice” argument is dead. File correctly now.

2. What counts as a disposal vs income

HMRC splits crypto activity into two buckets.

Capital Gains Tax — disposals

A “disposal” is anything where you part with crypto you held. Specifically:

• Selling crypto for fiat (GBP, USD)
• Swapping one token for another (ETH → SOL, USDC → ETH — both are disposals)
• Spending crypto on goods or services
• Gifting crypto to anyone other than your spouse / civil partner
• Most DeFi deposits (lending, LP’ing) — see section 6

Income Tax — earned crypto

Crypto received is income at GBP value on the day you receive it:

• Staking rewards
• Mining rewards
• Airdrops you earned through activity (didn’t earn? still possibly income — see DeFi)
• Liquidity-mining rewards
• Crypto paid to you as employment / consulting

The double-tax catch:when a staking reward you received as income (and paid income tax on) later goes up in price and you sell it, the GBP value at receipt becomes your cost basis for the capital gains calc. Don’t double-count.

3. Section 104 pooling, with a worked example

Most UK crypto holders buy the same token multiple times at different prices. HMRC doesn’t let you cherry-pick which lot you sold. Instead, you average everything into one “Section 104 pool” per token, and that average is your cost basis.

Worked example — ETH

That £1,700 sits below the £3,000 allowance, so no tax owed — but it still gets reported on the SA108 if disposal proceeds total > £50,000 OR you’re already filing a Self Assessment for any reason.

4. The 30-day ‘bed-and-breakfast’ rule

Two rules override Section 104 pooling — and you have to apply them before the pool calculation:

• Same-day rule: if you bought and sold the same token on the same day, those trades are matched against each other first.
• 30-day rule: if you sold a token and then bought it back within the next 30 days, the sale is matched against that later buy — not against the pool.

The 30-day rule stops people “bed-and-breakfasting” — selling at a loss to harvest a tax deduction and immediately rebuying. If you genuinely want to crystallise a loss, wait at least 31 days before rebuying.

5. The £3,000 annual exempt amount

Every UK individual gets £3,000 of capital gains free of CGT each tax year. Net gains above that are taxed at 18% if you’re a basic-rate taxpayer, 24% above the basic-rate band (the rates rose in the Autumn 2024 budget).

Important nuance: the £3,000 is per person, not per asset class. If you used £2,500 of it on a property gain elsewhere this year, only £500 is left to offset crypto gains.

Use it or lose it:the AEA doesn’t carry over. If you’re sitting on unrealised gains and you have AEA left in this tax year, harvesting some now (with a real 31+ day gap before rebuying if you want to keep the position) is a legitimate tax-planning tool.

6. DeFi, staking, airdrops & mining

HMRC’s position on DeFi is detailed in their cryptoassets manual (CRYPTO61210 onwards). The headlines:

DeFi lending & liquidity pools

Depositing tokens into a lending protocol or LP usually counts as a disposalof the deposited token in exchange for a different token (the deposit receipt / LP token). That triggers a capital gains event at the time of deposit. When you withdraw, that’s another disposal back the other way.

Rewards earned on top — interest from a lending protocol, fees from an LP, governance tokens — are income at GBP value when received.

Staking

Liquid staking (e.g. via Lido, Rocket Pool) is treated like DeFi — depositing ETH for stETH is generally a disposal. Native protocol staking (validator runs) is murkier; HMRC has indicated rewards are income but the underlying staked balance isn’t a disposal as long as you’re not parting with beneficial ownership.

Airdrops

Airdrops you didn’t earn are taxed when sold (CGT on the gain from £0 cost basis, or from the value at receipt if HMRC treats it as miscellaneous income). Airdrops you earned through activity (e.g. Arbitrum, Optimism, EigenLayer) are income at GBP value on receipt.

Mining

Hobby mining: rewards are taxable income at GBP value on receipt. The trading badges test only kicks in for serious commercial setups.

7. Filing: SA108 vs SA100

The two forms you need:

• SA108 — Capital Gains Summary.Report each disposal in the “Listed shares and securities” or the dedicated “Cryptoassets” section (HMRC added a crypto-specific area for the 2024/25 return onwards). For each disposal you need: date, asset, disposal proceeds, allowable costs, gain/loss.
• SA100 Box 17 — Other taxable income.Sum of staking, mining, airdrop and crypto-employment income for the year, in GBP. Brief description in the “additional information” box.

You don’t need to attach every single disposal as a line item — HMRC accepts a summary report so long as you keep the working backed up. Most people attach a CSV / PDF as supplementary information.

8. Tools, exchanges & how to keep records

HMRC requires you to keep records for at least 5 years after the filing deadline (so 2025/26 records → keep until early 2032). For each disposal you need:

• Date of acquisition and disposal
• Type of crypto and quantity
• GBP value at the time (HMRC accepts published exchange rates / CoinGecko-style data)
• Pool balance before and after
• Wallet addresses involved (helps if HMRC queries)

Tools that calculate this automatically: Koinly (US-origin, £49–£179/yr, CSV imports), Recap (UK-only team, £149/yr flat), and CryptoLens (UK-first, £4.99/mo, scans wallets directly so you don’t juggle CSVs).

9. Common mistakes that trigger nudge letters

• Forgetting that swaps are disposals. Every ETH→SOL trade is a CGT event, not a transfer.
• Using FIFO instead of pooling. Some US tax tools default to FIFO; HMRC requires pooling.
• Missing the 30-day rule. Selling at a loss and rebuying within 30 days nullifies the loss for tax purposes.
• Not tracking historic exchange CSVs. Some exchanges (FTX, Celsius, Voyager) are gone — pull your data NOW if you used them.
• Treating gas fees as costs of disposal. They’re allowable, but only if you can evidence them in GBP.
• Confusing cost basis on staking rewards. Their cost basis is the GBP value at receipt (which you already paid income tax on) — not £0.

10. FAQ