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Understanding the UK’s crypto tax rules is important for anyone who trades or holds digital assets. In the UK, cryptocurrencies like Bitcoin and Ethereum are treated as property, meaning that tax may be owed even if you didn’t convert your coins or tokens into legal tender. Which tax could apply depends on the type of transaction and your total annual earnings. In this guide, we explain when cryptocurrency becomes taxable in the UK, how to calculate what you might owe, and what allowances could keep your crypto transactions tax-free.
Capital gains on crypto: Selling, swapping, or gifting crypto can count as a disposal and may trigger capital gains tax (CGT).
Income tax: If you earn crypto from mining, staking, or getting paid in cryptocurrency, HM Revenue and Customs (HMRC) may treat it like regular income, meaning you might need to pay income tax on the cryptocurrency.
Tax-free thresholds: Some crypto gains are tax-free if they fall within your personal allowances.
Reporting crypto to HMRC: UK taxpayers must declare cryptocurrency gains and income to HMRC through a Self Assessment tax return.
Info: This content is for informational purposes only and does not constitute tax, legal, or financial advice. Cryptocurrency taxation can vary depending on your personal circumstances, and rules may change over time. Seek advice from a qualified tax professional or HM Revenue & Customs (HMRC) if you are unsure about your obligations. We are not responsible for any tax liabilities you may incur.
Some cryptocurrency activities can trigger a tax obligation in the UK. HM Revenue and Customs (HMRC) generally treats an action as a taxable event if you:
sell cryptoassets
exchange one token or coin for another (for example, trading Bitcoin for Ethereum)
use cryptoassets to pay for goods or services
transfer cryptoassets as a gift to someone else
These events are known as disposals and may be subject to capital gains tax. Moving tokens or coins between your own wallets would not be considered a disposal.
When it comes to crypto tax in the UK, HMRC differentiates between selling (through disposals) and receiving. If you earn crypto through mining, staking, or getting paid in cryptocurrency, that’s usually taxed as income rather than capital gains.
How do you know which tax applies? Cryptocurrency taxes depend on the type of transaction and how you earn or use the crypto.
If an investor makes a profit when selling or exchanging cryptoassets (or any of the other taxable events listed above), they may have to pay capital gains tax (CGT). The rates depend on the individual’s income.
As off 30 October 2024, the CGT rates for assets including cryptocurrency are:
18% for basic rate taxpayers
24% for higher and additional rate taxpayers
CGT is only charged on gains above the annual tax-free allowance, which is £3,000 for the 2025/26 tax year. HMRC applies this allowance against the portion of your gains that would be taxed at the highest rate first, which can reduce the total tax you pay.
UK crypto tax rates and thresholds can change each year. Verify the latest information with HMRC or a qualified tax adviser.
Some crypto-related actions don’t count as disposals but may still be subject to taxation. If you receive cryptocurrency through mining, staking, airdrops, or as payment for services, it may be treated as income by HMRC and subject to income tax.
The amount you may be taxed on is typically based on the market value of the cryptoasset in British pounds (GBP) at the time you receive or gain control over it. The taxable crypto income is then assessed together with income from other sources to calculate how much tax you may need to pay in any given tax year.
The income tax rates for the 2025/26 tax year are as follows:
No income tax is due on annual earnings below £12,570.
Income between £12,571 and £50,270 is taxed at 20%.
Income between £50,271 to up to £125,140 is taxed at 40%.
Income above £125,140 is taxed at 45%.
How much you may ultimately pay in tax on crypto depends on your total income and how HMRC classifies your activity.
Cryptocurrency earned through mining is usually considered income and taxed based on the fair market value at the time it was received. If mining activity is frequent and organised, HMRC may classify it as a business, requiring you to register as self-employed and potentially pay National Insurance contributions in addition to income tax. You may have to pay tax on crypto gains if you later sell the asset.
Crypto rewards for staking, lending, or liquidity provision may be taxed as income when they become accessible. If you later dispose of the crypto, any increase in value from the time you received it may be subject to capital gains tax.
Airdropped coins or tokens are generally taxable if you receive them in exchange for a service or as part of a promotion you actively signed up for. If the airdrop is unsolicited and you did nothing to earn it, HMRC may not treat it as taxable income, though capital gains tax could still apply when you dispose of the coins or tokens.
Because cryptocurrency tax can vary depending on the specifics of the activity, HMRC guidance should be consulted regarding individual circumstances.
Depending on your total gains or earnings in the tax year, you may fall under certain thresholds that make your crypto transactions tax-free. Here are some of the allowances for the 2025/26 tax year:
Capital gains tax (CGT) allowance: No CGT is due if your total profits from selling crypto (and any other relevant assets) stay under £3,000, but this only applies to gains from disposing of those assets.
Income tax allowance: The standard Personal Allowance is £12,570 for the 2025/26 tax year, so crypto earnings from sources such as mining or staking combined with any other income that stay below this amount may not be subject to income tax.
£1,000 trading and miscellaneous allowance: If you earn only small amounts of crypto — for example, occasional payments that count as miscellaneous income — you might be able to use the £1,000 allowance.
These are threshold indicators only. Whether they apply depends on your full income, gains, and how HMRC classifies your crypto activity.
Crypto tax in the UK is usually based on the difference between the sale or disposal price of a cryptoasset and its purchase price, including any allowable transaction costs. For example, if you buy a coin or token for £200 and sell it for £500, then you made a capital gain on crypto of £300 before fees. If you had £20 in transaction costs, you would report a gain of £280.
If you bought the same coin or token in different transactions, you would use the share pool approach. This method calculates your average cost basis by adding up all your purchase prices and dividing by the number of units held. This helps give a fair value when you dispose of some of your crypto.
Capital losses from disposing of cryptoassets — whether through selling, swapping, or gifting them below market value — can be used to offset capital gains on cryptocurrency. Losses can be applied against gains in the same tax year or carried forward to future years.
To use this, losses must be reported to HMRC within four years from the end of the tax year in which the loss occurred. Unused losses can be carried forward indefinitely, but they must be declared.
Keeping accurate records ensures that any future gains can be calculated correctly. Using a cryptocurrency platform or exchange such as Bitpanda provides the option to download your transaction history so you can clearly document and view your crypto trades.
Residents in the UK who have undertaken crypto activity that results in taxable income or gains will need to report the activity to HMRC. This is usually done through the Self Assessment tax return system. You must register by 5 October following the end of the tax year and submit your online return by 31 January.
Key cryptocurrency tax reporting details include:
type of cryptoasset
dates of acquisition and disposal
amounts received and costs incurred
GBP value at the time of each transaction
wallet addresses, exchange statements, and transaction IDs
Even if you fall below the tax-free thresholds, HMRC recommends keeping detailed records of each transaction. Read more about Self Assessment on the GOV.UK website.
When it comes to UK crypto tax, it’s important to maintain records of all cryptocurrency activity, as these records will be used to calculate gains and losses for reporting to HMRC.
HMRC provides details on cryptocurrency reporting requirements. Data from platforms such as Bitpanda can be helpful when documenting transactions.
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Sign up hereDon’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.
Here we answer the most common questions around crypto taxes in the UK.
Want to learn more about cryptocurrencies? In the Bitpanda Knowledge Hub, you’ll find a wide range of guides and tutorials explaining the basics.
This article is distributed for informational purposes, and it is not to be construed as an offer or recommendation. It does not constitute and cannot replace investment advice. Bitpanda does not make any representations or warranties as to the accuracy and completeness of any information contained herein. Investing carries risks. You could lose all the money you invest.
