Cryptocurrency Capital Gains Tax Rates for 2026/27
For the 2026/27 tax year, running from 6 April 2026 to 5 April 2027, the annual Capital Gains Tax exempt amount for individuals is £3,000.
This allowance applies to your total qualifying capital gains, not separately to each cryptocurrency you own. Unused allowance can’t be carried forward to the next tax year.
The main Capital Gains Tax rates applicable to cryptocurrency are:
- 18%: For gains falling within your available basic-rate Income Tax band.
- 24%: For gains falling above the basic-rate band.
Your taxable income and gains are considered together when determining which rate applies. This means someone earning a higher salary may pay more Capital Gains Tax on exactly the same cryptocurrency profit than someone with a lower income.
For example, if you have a £10,000 taxable crypto gain after allowances and the entire gain falls within the higher-rate band, the CGT liability would be £2,400.
It’s also worth remembering that the £3,000 allowance covers other chargeable gains, including those from shares held outside tax-advantaged accounts and certain property disposals.
Because the allowance is personal, married couples and civil partners each have their own £3,000. Genuine transfers between spouses or civil partners are normally made on a no gain, no loss basis, so some couples spread disposals between them to use both allowances. Take advice before restructuring ownership, as the transfer needs to be real.
You can check the current rates and allowances on GOV.UK’s Capital Gains Tax rates page.
How Do You Calculate Cryptocurrency Capital Gains?
Calculating crypto gains isn’t always as straightforward as subtracting what you paid from what you received.
HMRC has specific rules governing how the acquisition costs of cryptoassets are calculated, particularly when you’ve bought and sold the same type of token multiple times.
Section 104 Pooling
For most individual investors, cryptocurrency holdings of the same type are grouped into what’s known as a Section 104 pool.
Rather than tracking each individual coin separately, you maintain a running total of the quantity held and its allowable acquisition cost.
When you dispose of some of those assets, you normally calculate the allowable cost using the average pooled cost per unit.
Example (based on HMRC’s own illustration): you buy 100 tokens at £2 each (£200), then 300 more at £1 each (£300). You now hold 400 tokens with a pooled cost of £500, an average of £1.25 per token. If you sell 200 tokens, the allowable cost for your calculation is £250 (200 × £1.25), which you deduct from the sale proceeds to find the gain.
The Same-Day and 30-Day Rules
Before using the Section 104 pool, you must consider HMRC’s matching rules:
- Same-day rule: Disposals are matched with acquisitions of the same cryptoasset made on the same day.
- 30-day rule: Remaining disposals are matched with acquisitions of the same cryptoasset made during the following 30 days.
- Section 104 pool: Any remaining disposal is matched against the pooled holding.
These rules are particularly important for frequent traders and anyone selling crypto before buying it back shortly afterwards.
Simplified example: you hold 1 ETH with a pooled cost of £1,500 and sell it for £2,000. Ten days later you buy 1 ETH back for £1,800. Under the 30-day rule the sale is matched with the £1,800 repurchase, not the pooled £1,500 cost, so your gain is £200 rather than £500. Selling at a loss and buying back shortly afterwards can have the same kind of effect, so it may not produce the tax result you expected.
Allowable Costs
You can generally deduct costs such as transaction fees and the cost of obtaining a valuation. You can’t deduct costs you’ve already used against profits for Income Tax, and the costs of mining activities (such as equipment and electricity) aren’t allowable for Capital Gains Tax.
HMRC explains these calculations in its Cryptoassets Manual and in its guidance on checking if you need to pay tax when you sell cryptoassets.
Do You Pay Income Tax on Cryptocurrency?
Not every cryptocurrency transaction falls under Capital Gains Tax.
When cryptoassets are received as payment or as a reward for certain activities, HMRC may treat their value as taxable income.
Cryptocurrency Mining
If you receive cryptocurrency through mining, the tax treatment depends on the nature and scale of your activities.
Occasional mining may generate miscellaneous taxable income, while more substantial, organised activities could amount to trading income.
Factors such as commercial organisation, frequency, risk and the level of activity can influence the treatment.
If the activity amounts to a trade, allowable business expenses may be deductible when calculating taxable profits. Those same mining costs can’t then be used against a later Capital Gains Tax gain.
Staking Rewards
Cryptocurrency earned through staking may also be subject to Income Tax when received, depending on the circumstances.
The sterling value of the reward at the relevant time will generally be important when calculating the income arising.
If you later sell those tokens, a separate Capital Gains Tax calculation may be required. The value already brought into account for Income Tax will normally form part of the acquisition cost for CGT purposes.
Separately, the rules on whether the act of staking or lending your tokens is itself a disposal are due to change. See proposed DeFi changes from April 2027 below.
Airdrops
Free cryptocurrency received through an airdrop isn’t automatically tax-free.
Income Tax may apply where tokens are received in return for services or as part of a trade or business. However, some unsolicited airdrops received without providing services or anything in return may not be subject to Income Tax on receipt.
Any subsequent disposal can still create a Capital Gains Tax liability.
Being Paid in Cryptocurrency
If you’re employed and receive cryptocurrency as part of your salary or bonus, its value may be subject to Income Tax and National Insurance contributions.
The employer’s PAYE obligations depend on the type of cryptoasset and the payment arrangements.
Similarly, if you’re self-employed and accept cryptocurrency for your services, the sterling value of the payment normally forms part of your business turnover.
Cryptocurrency Tax for Sole Traders and Freelancers
For sole traders, freelancers and contractors, cryptocurrency can create additional bookkeeping responsibilities.
Suppose you’re a freelance designer and a client pays you £1,500 worth of Ethereum for a completed project.
You would generally record £1,500 as business income, assuming that represents the sterling value of the payment when received.
If you later sell the Ethereum for £1,900, you may also have a £400 capital gain, subject to the usual calculations and allowances.
In other words, there can be two separate tax events:
- The original receipt of cryptocurrency as business income.
- The subsequent disposal of cryptocurrency at a gain or loss.
Where cryptocurrency activity itself amounts to a financial trade, different rules may apply to the profits and losses.
For anyone already managing invoices, expenses and Self Assessment, this makes accurate transaction records particularly important.
Cryptocurrency Tax for Limited Companies
Limited companies can also own, receive and dispose of cryptocurrency, but the tax treatment differs from that of individuals.
A company will generally pay Corporation Tax on taxable profits arising from its cryptocurrency activities. The treatment depends on whether the cryptoassets are held as investments, used in trading activities or accounted for in another way.
Corporation Tax on Cryptocurrency Profits
For the financial year starting 1 April 2026, the main Corporation Tax rates are:
- 19% small profits rate: Generally applies to companies with profits of £50,000 or less.
- 25% main rate: Generally applies to companies with profits above £250,000.
- Marginal relief: Applies where profits fall between these limits, gradually increasing the effective rate from 19% to 25%.
The limits are tested against a company’s augmented profits. They are reduced where a company has associated companies or an accounting period shorter than 12 months, and the small profits rate is not available to certain companies.
For a company holding cryptoassets as investments, profits on disposal may fall within the Corporation Tax chargeable gains rules. Where a company is trading in cryptoassets, profits will generally be calculated under the trading rules instead.
Unlike individuals, limited companies don’t benefit from the £3,000 annual CGT exempt amount.
Accepting Cryptocurrency Payments Through Your Company
If your limited company accepts Bitcoin or another cryptocurrency as payment for goods or services, you’ll need to account for the transaction properly.
This includes:
- Recording the sale at its appropriate sterling value.
- Accounting for VAT where applicable.
- Recording the cryptoasset received in the company’s accounting records.
- Calculating any subsequent taxable gain or loss when the asset is disposed of.
- Maintaining evidence of the exchange rates and valuations used.
Receiving payment in cryptocurrency doesn’t automatically remove the requirement to charge VAT. The VAT treatment is generally determined by the underlying goods or services being supplied.
For further technical detail, see HMRC’s Cryptoassets Manual.
Can You Claim Cryptocurrency Losses Against Tax?
Yes, in many circumstances, cryptocurrency losses can reduce your Capital Gains Tax liability.
If you dispose of cryptocurrency for less than its allowable cost, you may realise a capital loss.
For example:
- You purchase cryptocurrency for £6,000.
- You later sell it for £3,500.
- You realise a capital loss of £2,500 before allowable transaction costs.
That loss could potentially be offset against other chargeable gains, subject to the normal rules.
You need to report capital losses to HMRC before you can use them. Unused allowable losses can generally be carried forward to future tax years, but only if they are reported within the relevant time limit, which is normally four years from the end of the tax year in which the loss arose.
What About Lost or Stolen Cryptocurrency?
Losing access to a crypto wallet or having cryptocurrency stolen doesn’t automatically create an allowable capital loss.
HMRC’s position is that misplacing a private key isn’t a disposal, because the tokens still exist on the blockchain. Theft is generally not treated as a disposal either.
However, if you can show there is no prospect of recovering the private key or accessing the tokens, you can make a negligible value claim. If HMRC accepts it, you’re treated as having disposed of and reacquired the tokens, which crystallises the loss. The claim is made through your tax return and applies to the whole Section 104 pool for that token, not individual coins. You’ll need to be able to evidence that the tokens had value and that recovery is genuinely not possible.
The conditions are specific, so it’s worth taking professional advice before assuming a lost or stolen cryptocurrency investment can be written off against your tax bill.
Do You Need to Report Cryptocurrency to HMRC?
Whether you need to report cryptocurrency depends on your circumstances, the size of your gains and the type of income you’ve received.
If you already complete a Self Assessment tax return, you may need to include cryptocurrency gains or income within the relevant sections. Self Assessment returns now include a dedicated cryptoasset section, available from the 2024/25 tax year onwards, where gains and losses are reported separately from other assets.
For the 2026/27 tax year, you would generally need to report chargeable gains where your total gains before deducting losses exceed the annual exempt amount.
You may also need to report where your total disposal proceeds exceed £50,000 for the tax year, even if the resulting gains are below the annual exemption, if you are registered for Self Assessment.
Crypto income may also need to be declared depending on its nature and amount.
If you don’t normally submit a Self Assessment return but have taxable cryptocurrency gains, you may need to register for Self Assessment. If you’re eligible, you may be able to use HMRC’s real time Capital Gains Tax service to report and pay instead.
HMRC has guidance on reporting and paying Capital Gains Tax.
Cryptocurrency Tax Deadlines for 2026/27
Cryptocurrency gains and income are generally reported according to the same tax year and Self Assessment timetable as other personal taxable income and gains.
For transactions falling within the 2026/27 tax year, the key dates are:
| Deadline | What it means |
|---|
| 5 April 2027 | End of the 2026/27 tax year. |
| 5 October 2027 | Deadline to notify HMRC of a new Self Assessment liability where required. |
| 31 October 2027 | Deadline for submitting a paper Self Assessment tax return. |
| 31 January 2028 | Deadline for online Self Assessment filing and payment of tax due for 2026/27. |
These are the standard deadlines. Different reporting or payment arrangements may apply in particular circumstances.
For limited companies, Corporation Tax is normally payable nine months and one day after the end of the accounting period, while the Company Tax Return is generally due 12 months after the accounting period ends. Different payment rules apply to some larger companies.
HMRC Crypto Letters: What to Do If You Receive One
HMRC has been writing to people it believes may have under-declared crypto gains or income. These are often called “nudge letters”. Reported figures put the number sent in 2025/26 at over 81,000, up from around 65,000 the year before, and HMRC is running another wave between July 2026 and March 2027.
A nudge letter is not a formal investigation. It means HMRC’s data suggests your return may be missing something, and it gives you the chance to review your position and correct it before HMRC takes further action.
If you receive one:
- Don’t ignore it. Letters, emails, texts and HMRC app notifications can all be used.
- Review every crypto transaction for the years in question, including swaps and spending, not just sales to pounds.
- Check whether the return is still open. If it is, you may be able to amend it. For the 2024/25 return, filed by 31 January 2026, amendments can generally be made until 31 January 2027.
- For earlier years, HMRC’s Cryptoasset Disclosure Service is the route for telling HMRC about unpaid tax.
- Get help if the history is complicated. Multiple exchanges, DeFi activity and several years of transactions are easier to reconstruct with an accountant.
Received a crypto letter from HMRC? Contact Accounting Wise and we’ll help you work out where you stand.
What Happens If You Don’t Declare Cryptocurrency Tax?
HMRC expects cryptocurrency gains and income to be reported accurately, just like any other taxable activity.
Failing to declare taxable crypto transactions can lead to additional tax, interest and penalties.
Where a Self Assessment return is filed late, an initial £100 fixed penalty can apply, even where there’s no tax to pay. Further penalties may arise if the return remains outstanding.
Late payment can also result in interest and additional penalties.
Where a return contains an inaccuracy, penalties depend on factors such as whether the error was careless, deliberate or deliberately concealed, and whether the taxpayer disclosed it voluntarily.
It’s important not to assume that using an overseas cryptocurrency exchange means your transactions are invisible to HMRC.
New Crypto Reporting Rules: What Changed From 1 January 2026?
One of the biggest developments for UK cryptocurrency investors is the introduction of enhanced reporting requirements under the Cryptoasset Reporting Framework (CARF).
From 1 January 2026, UK-based cryptoasset service providers have been required to collect information about their users and transactions. The first annual reports, covering calendar year 2026, are due to HMRC by 31 May 2027. The UK scheme also covers UK-resident users, not just cross-border activity.
This is designed to improve tax transparency and allow tax authorities to exchange information about cryptoasset transactions internationally.
As a user, you’ll be asked by your providers for details such as:
- Your name, address and date of birth.
- Your tax residence.
- Your National Insurance number or tax reference.
Providers will then report that information, along with a summary of your transactions, to HMRC. Failing to provide the information requested can lead to a fine of up to £300.
For individuals and businesses, the important point is that HMRC will have access to more structured information about cryptocurrency transactions. The responsibility for calculating and reporting the correct tax liability, however, remains with the taxpayer.
You can read more in HMRC’s guidance on the information you need to give to UK cryptoasset service providers.
Proposed DeFi Changes From April 2027
On 13 July 2026, the government published draft legislation for Finance Bill 2026/27 covering the tax treatment of DeFi lending and staking. The intention is that, from 6 April 2027, certain lending and staking arrangements will be treated as no gain, no loss, so tax would generally be deferred until there is a real economic disposal.
Under current rules, whether lending or staking tokens triggers a disposal can depend on whether beneficial ownership changes, which has left many DeFi users in a grey area.
This is draft legislation and may change before it becomes law, so it doesn’t alter your 2026/27 position yet. If you use lending protocols, liquidity pools or staking, keep detailed records now. The transition rules, including any treatment of existing holdings, are still being finalised.
Making Tax Digital and Cryptocurrency
Making Tax Digital for Income Tax is another consideration for self-employed individuals and landlords who also invest in cryptocurrency.
It is being introduced in phases, based on your gross qualifying income from self-employment and property:
- From 6 April 2026: qualifying income over £50,000 (based on your 2024/25 tax return).
- From 6 April 2027: qualifying income over £30,000 (based on 2025/26).
- From 6 April 2028: qualifying income over £20,000 (based on 2026/27).
Personal cryptocurrency capital gains aren’t normally included when determining qualifying income for MTD for Income Tax. Income from a crypto-related trade you run as a sole trader, however, would be part of your self-employment income.
If you’re self-employed and cryptocurrency is part of your business activity, it’s important to distinguish between business income and personal investment gains.
Being within MTD doesn’t remove the requirement to report capital gains correctly, and the reporting arrangements for gains may differ from those for business income.
See HMRC’s guidance on whether and when you need to use Making Tax Digital for Income Tax for more information.
How to Keep Accurate Cryptocurrency Tax Records
Good record-keeping is one of the easiest ways to avoid unnecessary problems with cryptocurrency taxation.
Crypto transactions can quickly become difficult to reconstruct, especially if you use multiple exchanges, wallets or decentralised finance platforms.
HMRC expects taxpayers to retain sufficient records to support their calculations. Exchange reports can help, but they aren’t tax calculations and won’t track your pooled costs, so you need to keep your own records.
Your Cryptocurrency Tax Checklist
- Record every transaction: Keep dates, quantities, values and details of the cryptoassets involved.
- Track sterling values: Record the GBP value of transactions using a consistent and supportable valuation method.
- Keep exchange statements: Download transaction histories and supporting reports regularly.
- Record transaction fees: Certain fees may be allowable when calculating gains.
- Identify transfers between your own wallets: These shouldn’t automatically be treated as sales.
- Track staking and mining rewards: Record their values and any associated taxable income.
- Keep pool records: For each token, record the number held, pooled cost before and after each disposal, and the date.
- Review capital losses: Make sure eligible losses are properly reported.
- Reconcile your holdings: Check that your transaction history matches the cryptocurrency you actually own.
- Review your position before year-end: Don’t leave the entire calculation until your tax return is due.
Dedicated cryptocurrency tax software can help consolidate transactions, but automated reports should still be checked. Incorrect transaction classifications, missing wallet transfers and incomplete exchange histories can all lead to inaccurate tax calculations.
Common Cryptocurrency Tax Mistakes to Avoid
From a practical accounting perspective, a few mistakes come up repeatedly.
Assuming Crypto-to-Crypto Trades Are Tax-Free
Swapping one cryptocurrency for another is generally a taxable disposal. You don’t need to convert anything into pounds for Capital Gains Tax to arise.
Ignoring Small Transactions
Frequent small trades can add up. The number of transactions also matters when calculating pooled acquisition costs and applying HMRC’s matching rules.
Confusing Income and Capital Gains
Staking rewards, mining income and crypto received as payment can have a different tax treatment from investment gains.
Forgetting Previous Years
If you’ve made taxable cryptocurrency gains in earlier tax years and haven’t reported them, ignoring the problem won’t make it disappear.
HMRC provides disclosure routes for correcting undeclared income and gains, including its Cryptoasset Disclosure Service. Voluntarily addressing errors can help reduce the risk of higher penalties.
Mixing Personal and Company Cryptocurrency
If you operate a limited company, keep company-owned cryptocurrency separate from your personal investments.
Transferring assets between yourself and your company can have tax and accounting consequences, even when you control both. Transfers between connected persons are generally treated as taking place at market value for Capital Gains Tax.
Need help with cryptocurrency tax?
At Accounting Wise, we help UK individuals, sole traders and limited company directors make sense of their tax responsibilities. Whether you’re working out cryptocurrency gains alongside your Self Assessment return or need guidance on how digital assets affect your business accounts, our team can help you understand your obligations and plan ahead.
Get in touch with Accounting Wise today to talk through your cryptocurrency tax position.
This guide is general information based on UK tax rules as at October 2026 and is not personal tax advice. Tax rules and thresholds can change, so check your own circumstances before acting.
