HMRC Crypto Tax Guide 2026: Gains, Income, DeFi and Filing

UK crypto taxation starts with what actually happened, not the exchange event name. This pillar guide connects HMRC rules for private investment, exceptional trading activity, disposals, pooled cost basis, rewards, DeFi, losses, filing and 2026 CARF reporting.

Reviewed September 1, 2026. This guide focuses on individuals. HMRC says most individuals hold cryptoassets as personal investments, so Capital Gains Tax normally applies to disposals. Income Tax can apply when tokens are received, and only exceptional buying-and-selling activity reaches the level of a financial trade.

Investment, income receipt or financial trade?

Calling yourself a trader—or an exchange labelling an event a trade—does not create a tax trade. HMRC's individual trading guidance says only exceptional circumstances involve enough frequency, organisation and sophistication for buying and selling exchange tokens to be a financial trade.

The categories can coexist. An investor may have capital disposals, staking income and employment income in the same year. Do not force every row into one category based on account type.

What HMRC treats as a crypto disposal

A chargeable disposal includes selling for money, exchanging one token for another, using tokens for goods or services, and giving them away other than under the spouse or civil-partner treatment. A gift to another person is generally valued at market value even when no money is received.

• BTC to GBP: disposal of BTC.
• BTC to ETH or USDT: disposal of BTC and acquisition of the received token.
• Crypto debit-card purchase: disposal when the crypto funds the purchase.
• Own-wallet transfer: no disposal while beneficial ownership is retained.
• Donation to charity: special relief can apply, subject to exclusions.

Always compute in pounds sterling. A transaction denominated in US dollars or another token needs a defensible sterling valuation at the tax point. Keep the source and timestamp rather than relying on today's price.

Capital gains rates, costs and the annual exempt amount

For both 2025/26 and 2026/27, the individual AEA is £3,000 and the standard individual CGT rates are 18% and 24%. The rate depends on taxable income plus taxable gains. The UK crypto rates guide gives the ordering and worked examples.

A simplified gain is disposal proceeds minus allowable acquisition and disposal costs. Allowable costs can include the sterling purchase consideration, qualifying distributed-ledger fees and certain valuation or contract costs. Exchange deposits, withdrawals and general subscriptions are not automatically deductible. A cost used against income cannot be used again for CGT.

If tokens were received as taxable income, later CGT normally measures the change after the amount already brought into account for income. Preserve the receipt valuation so the same economic amount is not taxed twice through missing basis.

Section 104 pool, same-day rule and 30-day rule

Fungible tokens dealt in without identifying the particular units are normally pooled by beneficial owner and token type. The matching order is:

1. acquisitions of the same token on the same calendar day as the disposal;
2. acquisitions of that token in the following 30 days, earliest disposal first;
3. the section 104 pool for the remaining quantity.

The pool holds total units and pooled allowable cost. A partial disposal removes the corresponding proportion of cost. Each token needs its own pool; BTC and wrapped BTC should not be merged without analysing whether they are legally the same asset. NFTs are individually identifiable and not section 104 pooled.

HMRC sets out the mechanics in CRYPTO22200. The 30-day matching guide explains why the rule changes basis rather than simply erasing a loss.

Mining, staking, airdrops and crypto pay

HMRC says exchange tokens received from employment or activities such as mining, staking and lending can be income. Outside a trade, mining, staking and lending receipts are generally other taxable income. The official crypto receipt guidance also explains the £1,000 trading and miscellaneous income allowance and subsequent CGT.

Airdrops need a separate test. Income Tax may not apply when tokens are received in a personal capacity without doing anything in return and outside a relevant trade. An airdrop supplied for a service or in expectation of a service is generally miscellaneous income or a trading receipt. Either type can create a capital gain or loss when later disposed of.

• Record the token, quantity, receipt time and accessible sterling value.
• Identify whether a service, action, trade or employment relationship caused the receipt.
• Track the value taxed as income into the CGT records.
• Do not label every unsolicited token as income or every airdrop as zero basis.

Why DeFi and wrapped-token treatment is fact-specific

Tax follows the legal and economic rights, not labels such as “deposit”, “stake” or “liquidity”. If beneficial ownership of tokens is transferred to a platform or smart contract and a different asset or claim is received, a capital disposal may occur. If ownership is retained, the result can differ.

For a DeFi return, HMRC considers whether it is compensation for a service or growth realised through a capital asset. An agreed periodic return suggests revenue; an uncertain return realised on disposal can suggest capital. No single factor decides the answer. Read the protocol terms and retain pool-token, receipt-token and smart-contract records. Our UK staking and DeFi guide provides a transaction-by-transaction checklist.

Capital losses, worthless tokens and theft

Current-year allowable losses reduce current gains before the AEA. Notified unused losses can be carried forward; a normal claim must be made within four years after the end of the disposal tax year. Brought-forward losses are generally used only as far as necessary to bring gains down to the AEA.

A price collapse alone does not realise a loss. A token that becomes worthless may support a negligible-value claim if the conditions are met. HMRC does not regard theft alone as a disposal because the owner may retain rights to recover the asset. Insolvency, fraud, bridge hacks and lost keys therefore require evidence and cannot all be mapped to one automatic loss event.

How 2025/26 crypto is reported

The 2025/26 SA108 introduces boxes 13.1 to 13.8 specifically for cryptoassets: disposal count, proceeds, allowable costs, gains, losses, claims, amounts reported through the Real Time service and tax paid. HMRC also asks for detailed computations.

For a newly required return, tell HMRC by 5 October 2026. The paper deadline is 31 October 2026, and the online filing and payment deadline is 31 January 2027. Crypto income belongs on the pages appropriate to employment, trading or miscellaneous income rather than being added to SA108 gains.

The step-by-step HMRC reporting guide maps the boxes and deadlines. A reliable report should reconcile wallets, preserve gross gains and losses separately, and distinguish unpriced or unclassified events rather than silently treating them as zero.

CARF reporting from 2026

CARF does not create a new taxpayer tax rate. It is a reporting framework for in-scope cryptoasset service providers. UK providers began due diligence and record keeping on 1 January 2026. Their first reports cover calendar year 2026 and are due by 31 May 2027.

Provider reports can include customer identity and aggregate transaction information, but they may not know self-custody basis, beneficial-owner transfers or UK pool calculations. Taxpayers must still prepare their own complete return. The CARF and HMRC guide separates user obligations from provider obligations.

UK crypto year-end checklist

• Export every platform before access or retention periods expire.
• Reconcile token balances and own-wallet transfers.
• Classify disposals and receipts by substance.
• Convert values to sterling at each tax point.
• Apply same-day, 30-day and section 104 rules.
• Separate CGT gains, losses and taxable income.
• Review missing prices, unsupported fees and DeFi ownership changes.
• Attach or retain the detailed computation supporting SA108.

UK crypto tax FAQ

Disclaimer: This article is for general informational purposes only and does not constitute tax advice. For individual tax advice, consult a licensed tax professional.