Crypto Tax UK — 2025/26 Guide
Updated for the 2025/26 tax year
HMRC treats cryptocurrency as property, not currency. That means Capital Gains Tax (CGT) applies when you dispose of crypto assets. The annual exempt amount for 2025/26 is just £3,000, down from £6,000 the previous year.
CGT Rates on Crypto (2025/26)
| Tax Band | Rate (Non-Property) | Rate (Property) |
|---|---|---|
| Basic rate (up to £50,270) | 10% | 18% |
| Higher rate (above £50,270) | 20% | 24% |
Crypto falls under the non-property rates: 10% for basic-rate taxpayers and 20% for higher-rate.
When You DO Pay Tax
- Selling crypto for GBP or any fiat currency
- Swapping one crypto for another (e.g. BTC → ETH)
- Spending crypto to buy goods or services
- Gifting crypto (unless to spouse/civil partner)
When You DON’T Pay Tax
- Buying crypto with GBP and holding it
- Transferring between your own wallets
- Gifting to spouse or civil partner
- Donating to a registered charity
Staking, Airdrops & Mining
Staking rewards and mining incomeare treated as miscellaneous income and taxed at your income tax rate. If it’s a trade (regular, organised activity), it could be trading income instead. Airdrops are only taxable if received in return for a service — random airdrops are not income but their cost basis is £0 for future CGT.
DeFi & NFT Tax Treatment
DeFi lending/liquidity pools: Providing tokens to a pool is a disposal if you receive different tokens back. Yield is income.
NFTs: Buying an NFT with crypto is two disposals — one of the crypto, one acquisition of the NFT. Selling the NFT is a CGT event.
Worked Example: Bitcoin Purchase & Sale
Scenario: Higher-rate taxpayer
- Bought 1 BTC at £20,000 in January 2024
- Sold 1 BTC at £50,000 in December 2025
- Gain: £50,000 − £20,000 = £30,000
- Annual exempt amount: −£3,000
- Taxable gain: £27,000
- CGT at 20% (higher rate): £27,000 × 20% = £5,400
If you were a basic-rate taxpayer and the gain stayed within the basic band, the tax would be £27,000 × 10% = £2,700.
Reducing Your Crypto Tax Bill
- Use your £3,000 annual exempt amount — sell in tranches across tax years.
- Transfer to spouse before selling — doubles the exempt amount to £6,000.
- Offset losses — if you sold at a loss, report it to HMRC to carry forward.
- Bed and breakfast rule: You cannot sell and rebuy the same token within 30 days to crystallise a gain/loss. HMRC matches the sale to the repurchase.
Record Keeping
HMRC requires records of every transaction: date, type, quantity, value in GBP, fees, and wallet addresses. Use crypto tax software (Koinly, CoinTracker, or CryptoTaxCalculator) to automate this. Keep records for at least 5 years after the Self Assessment deadline.