UK Crypto Tax: HMRC Pooling and the 30-Day Rule

In the UK, HMRC treats most people's crypto as a personal investment, so Capital Gains Tax is charged when you sell, swap, spend or give tokens away, and Income Tax applies to tokens you receive as pay, mining or staking rewards. Gains above the annual exempt amount (£3,000 for 2024-25, 2025-26 and 2026-27) are taxed at 18% or 24%. The part most people get wrong is cost: HMRC does not let you pick which coins you sold. It matches each disposal first against tokens bought the same day, then against tokens bought in the next 30 days, and only then against an average-cost "section 104" pool. Every rule below is taken from HMRC's Cryptoassets Manual and GOV.UK guidance, checked on October 22, 2026, and every pound figure in the worked examples is hypothetical.

Start Here: Is Your Activity Investment, Income or Trading?

HMRC's manual opens its individuals section by sorting people into three buckets, and which bucket you are in decides which tax applies before any arithmetic starts.

Investment (the default). HMRC's page on which taxes apply (CRYPTO20050) says individuals will be liable to Capital Gains Tax when they dispose of their cryptoassets, because most people hold them as a personal investment. That is the normal case for anyone who buys tokens on an exchange, holds them, and sells or swaps them later.

Income. Income Tax, and in employment cases National Insurance, comes in when tokens arrive as a reward or payment rather than as something you bought: an employer paying you in tokens, mining, transaction confirmation, staking rewards, and airdrops received in return for doing something.

Trading. A small number of people buy and sell so often, and in such an organised and sophisticated way, that the activity is a trade. HMRC's page on trading (CRYPTO20250) says it would expect individuals to be trading only in exceptional circumstances, and that whether buying and selling amounts to a trade is a question of fact, judged by the case law used for shares and securities. Calling your activity "trading" in a spreadsheet does not make it one. If it is a trade, Income Tax takes priority over Capital Gains Tax.

Most readers of this guide are in the first bucket with a few second-bucket receipts mixed in, such as staking rewards on a long-held position. The rest of the page follows that order: disposals first, then income, then the reporting mechanics.

Which Transactions HMRC Counts as a Disposal

A disposal is the event that triggers a Capital Gains Tax calculation. HMRC's page on disposals (CRYPTO22100) and the GOV.UK guidance "Check if you need to pay tax when you sell cryptoassets" list the same core events. The table below sorts the common situations into what HMRC treats as a disposal, what it treats as income, and what it treats as neither.

Two rows cause most of the confusion. The first is the swap. Exchanging one token for another feels like moving money around inside one account, but HMRC treats it exactly like selling the first token for its sterling value and buying the second. Each swap creates a gain or loss on the token you gave up, and each one has to be priced in pounds at the time.

The second is the gift. Giving tokens to a friend, an adult child or a sibling is a disposal at the sterling value of what you gave, so a gift of tokens that have risen in value can produce a taxable gain for the giver even though no money changed hands. Only gifts to a spouse or civil partner are carved out.

If you are planning a move from an exchange to your own wallet, the "not a disposal" row is the reassuring one. Moving tokens between addresses you control does not create a Capital Gains Tax event in itself. Our guide to moving crypto from an exchange to self-custody without losing it covers the practical side of that move, and the primer on what a crypto wallet actually holds explains why "your" coins never sit inside the wallet app.

How a Gain Is Calculated

The basic formula on the GOV.UK guidance page is short: the gain is normally what you received for the tokens minus what you paid for them, less allowable costs. In some cases, such as a disposal to a connected person or a gift, you use market value in place of the price you received.

HMRC's page on allowable expenses (CRYPTO22150) lists what you can deduct:

The same page lists what you cannot deduct. Costs already deducted against Income Tax profits cannot be deducted again. Mining costs, such as equipment and electricity, are not allowable for Capital Gains Tax. Fees for depositing or withdrawing pounds sterling are not allowable, because sterling is not an asset for Capital Gains Tax purposes, and fees for depositing or withdrawing other fiat currencies are not allowable either, because there is no acquisition or disposal to attach them to.

Everything has to be expressed in pounds. HMRC's GOV.UK page asks for the value in pounds of each transaction, which matters if you bought in dollars or swapped between tokens that never touched sterling. The exchange's own trade history is a starting point, not a tax calculation: GOV.UK states plainly that exchange transaction reports do not track pooled costs, so you have to keep your own.

The Matching Order: Same Day, Then 30 Days, Then the Pool

This is the rule that separates the UK system from the one most international guides describe. You do not choose which tokens you sold, and you do not use first-in-first-out. HMRC's pooling page (CRYPTO22200) applies the share identification rules from the Taxation of Chargeable Gains Act 1992 to fungible tokens, in a fixed order.

1. The same-day rule (TCGA 1992 section 105). All acquisitions of the same token type on the same day are treated as one acquisition, and all disposals on that day as one disposal. Disposals are matched first against acquisitions made that same day. In practice this means at most one gain or loss calculation per token type per day.

2. The 30-day rule (TCGA 1992 section 106A). Any part of a disposal not covered by same-day purchases is matched against tokens of the same type acquired in the 30 days after the disposal, earliest disposal first. This is the crypto version of the "bed and breakfasting" rule for shares: selling and buying straight back does not reset your cost to the pool average. Canada reaches a similar goal by denying the loss instead of matching it, as explained in our guide to the superficial loss rule for crypto.

3. The section 104 pool (TCGA 1992 section 104). Whatever is left is matched against the pool, a running total of all your tokens of that type with their combined allowable cost. Each token type has its own pool. The cost taken out on a disposal is the pooled cost multiplied by the share of the pool you disposed of. Canada also pools cost but has no same-day or 30-day matching; see our Canadian CRA crypto tax guide.

Non-fungible tokens sit outside this machinery. CRYPTO22200 says NFTs are separately identifiable, so they are not pooled and no matching rules apply: each NFT has its own cost.

HMRC publishes seven worked examples of these rules (CRYPTO22251 to CRYPTO22257), ending with one that applies all three in sequence and one on crypto-to-crypto swaps. The example below uses its own hypothetical figures, chosen to show the trap the rules create.

Worked Example: One Tax Year, Three Rules

Stated inputs, all hypothetical, for a basic-rate taxpayer in the 2025-26 tax year (6 April 2025 to 5 April 2026), holding a fungible token called Token K:

Step 1: the 3 June disposal of 5 tokens.

Gain on 3 June: £13,000 minus £12,200 = £800.

Step 2: what happens to the rest of the 20 June purchase. Only 3 of the 4 tokens bought on 20 June were used up by the 30-day rule. The remaining 1 token, with £2,400 of cost, joins the pool. The pool becomes 11 tokens with a cost of £22,400.

Step 3: the 1 September disposal of 6 tokens. There are no same-day purchases and no purchases in the following 30 days, so all 6 come from the pool. Cost: £22,400 × 6/11 = £12,218 (rounded). Proceeds £12,000, so a loss of £218. The pool carries forward 5 tokens with a cost of £10,182.

Step 4: the year's result. Gains of £800 and a loss of £218 net to £582. That is below the £3,000 annual exempt amount for 2025-26, so no Capital Gains Tax is due. Total disposal proceeds were £25,000, below the £50,000 reporting threshold described later, so a person already in Self Assessment would not be required to report these gains on that ground alone. The loss is still worth recording, because losses are set against gains of the same year automatically and HMRC's rules on reporting losses differ from those for gains.

What the shortcut would have produced. Suppose the same person ignored the matching rules and averaged every token they had ever bought, including the June purchases: 16 tokens for £34,600, or £2,162.50 each. The 3 June sale of 5 tokens would then carry a cost of £10,812.50 and show a gain of £2,187.50, almost three times the correct figure. The error can run the other way too, depending on whether prices rose or fell around the sale. The point is that a tax report built on simple averages or on first-in-first-out can be wrong in either direction, and HMRC's method is the one that counts.

Rates, the Annual Exempt Amount and a Second Example

The annual exempt amount is the slice of gains each person can make tax-free in a tax year. GOV.UK's table of rates and allowances (last updated 13 April 2026) shows how sharply it has been cut:

The 2024-25 split matters if you are reconciling that year: disposals made on or before 29 October 2024 use the old 10% and 20% rates, and disposals from 30 October 2024 use 18% and 24%.

Which of the two current rates applies depends on your income. GOV.UK's rates page says higher and additional rate taxpayers pay 24% on gains, while basic rate taxpayers pay 18% on gains that fit inside the unused part of their basic rate band and 24% on the rest. Its 2026-27 examples use a £37,700 basic rate band.

Second worked example (hypothetical). A basic rate taxpayer has £20,000 of crypto gains in 2025-26 and no losses. After the £3,000 annual exempt amount, £17,000 is taxable. Their taxable income leaves £10,000 of the basic rate band unused.

A higher rate taxpayer with the same gain would pay 24% on all £17,000, which is £4,080. Gains are added on top of income to find the band, so a large crypto gain can push part of itself into the higher rate even for someone whose salary is well inside the basic rate band.

Staking, Mining, Airdrops and Being Paid in Tokens

Income receipts follow a two-stage pattern: Income Tax when the tokens arrive, then Capital Gains Tax on any later change in value when you dispose of them.

Staking. HMRC's staking page (CRYPTO21200) says rewards are taxed as miscellaneous income unless the activity is a trade, in which case they are trade receipts. Whether staking is a trade depends on the degree of activity, organisation, risk and commerciality. The amount is the pound sterling value of the tokens at the time you receive them, and appropriate expenses can reduce it. If you keep the reward tokens, you may have to pay Capital Gains Tax when you later dispose of them. The GOV.UK guidance adds the key link between the two stages: where Income Tax has already been paid on tokens, Capital Gains Tax applies only to the gain made after you received them. For how staking itself works, see the explainer on proof of work versus proof of stake.

DeFi lending and liquidity pools. HMRC's DeFi section (CRYPTO61000 onward) separates the return from the movement of the tokens. On the capital side, CRYPTO61620 says a disposal happens when the lender or liquidity provider transfers beneficial ownership of the tokens to the borrower or platform, which turns on the contract terms; if the recipient can deal with the tokens freely, that points strongly to ownership passing. Adding tokens to a liquidity pool in exchange for a pool token is treated as an exchange, so the consideration is the sterling value of the token you receive. This is one of the areas where a protocol's terms matter more than its marketing, and specialist advice is usually worth paying for.

Mining. Mining and transaction confirmation produce income, and the mining costs (equipment, electricity) are not allowable costs when you later sell the mined tokens for Capital Gains Tax purposes.

Airdrops. CRYPTO21250 draws the line at whether you did something for the tokens. Tokens received without doing anything in return, and not as part of a trade or mining, may not be income at all. Tokens received in return for, or in expectation of, a service are income. Either way, disposing of the airdropped tokens later can produce a chargeable gain.

Paid in tokens by an employer. CRYPTO21100 covers tokens received as earnings from employment, including where they count as readily convertible assets, which affects how the tax and National Insurance are collected. Employees in this position should check their payslips and talk to the employer's payroll team before assuming nothing has been deducted.

Losses, Lost Keys, Theft and Worthless Tokens

Losses are where the UK rules are least intuitive, and where people who have already lost money can lose a relief as well by acting too late.

Ordinary losses. A loss on a disposal is deducted from gains in the same tax year. GOV.UK's losses page says that unused losses from earlier years can be deducted only while your total gain is still above the tax-free allowance, and anything left over carries forward. You can claim a loss up to 4 years after the end of the tax year in which you made the disposal, and a loss has to be reported to HMRC before it can be used.

Lost private keys. CRYPTO22400 says misplacing a key is not a disposal, because the tokens still exist on the ledger and you still own them. If there is no prospect of recovering the key or accessing the tokens, a negligible value claim may be possible. Before going down that road, the steps in our seed phrase and wallet recovery checklist are worth working through, because a claim is only for access that is truly gone.

Theft. CRYPTO22450 is blunt: HMRC does not consider theft a disposal, because the victim still owns the stolen asset and has a right to recover it. The practical result is that a theft victim cannot claim a capital loss on the stolen tokens. The same page says people who paid for tokens they never received may not be able to claim a capital loss either. Where you did receive tokens that later became worthless, a negligible value claim may be possible, but not if the tokens were already worthless when you acquired them.

That position surprises many fraud victims, and it is one more reason to treat anyone offering to "recover" stolen crypto for a fee with suspicion. Our explainer on why crypto recovery services are usually a second theft covers that pattern, and where to report a crypto scam and what evidence to send lists the official channels.

Negligible value claims. CRYPTO22500 sets out the mechanics. You can claim when tokens you still own have become of negligible value. The claim treats you as disposing of the tokens and immediately reacquiring them at the amount stated in the claim, which can be nil, and so crystallises the loss. For fungible tokens, the claim has to cover the whole section 104 pool of that token, not a slice of it. The claim must state the asset, the amount it is treated as disposed of for, and the date of the deemed disposal and reacquisition, and the resulting loss must be reported to HMRC.

Reporting: Thresholds, Forms and Deadlines

There are two separate questions: whether you owe tax, and whether you must report even when you do not.

When you must report. If your total gains for the tax year are above the annual exempt amount, you must report them and pay the tax, according to the GOV.UK cryptoasset guidance. If your gains are below the allowance there is no tax to pay, but GOV.UK's "work out if you need to pay" page says that if you are registered for Self Assessment you still report gains on your return when the total amount you sold assets for was more than £50,000, for 2023-24 onwards. For tax years before 2023-24 the threshold was four times the allowance. Note that this threshold is about proceeds, not profit: someone who traded £60,000 back and forth and ended roughly level can still have a reporting obligation.

How to report. GOV.UK gives two routes for crypto gains:

Deadlines for the 2025-26 tax year (6 April 2025 to 5 April 2026), from GOV.UK:

Unreported gains from earlier years. HMRC runs a Cryptoasset Disclosure Service for people who have unpaid tax on cryptoassets from earlier years. Its guidance page says income or gains from the current or previous tax year go on a normal Self Assessment return instead. You work out the tax, interest and penalties, submit the disclosure online, and pay within 30 days of submitting. How far back you go depends on behaviour: up to 4 years if you took reasonable care, up to 6 years if you did not take care, and up to 20 years for deliberate underpayment.

For comparison with another tax authority's approach, our explainer on the US Form 1099-DA shows what American brokers now report to the IRS about their customers' sales. Whatever a platform reports anywhere, it is at most a cross-check on a return, not a replacement for your own records, and GOV.UK's point that exchange reports do not track pooled costs applies to any such data.

Records HMRC Expects You to Keep

GOV.UK's guidance asks you to keep separate records for each transaction, including:

A practical way to meet that standard is a running ledger per token type with one row per day: tokens in, tokens out, sterling value, which matching rule each disposal used, and the pool balance after the day closes. Exporting the full history from every exchange you have used, including ones you no longer use, is worth doing now rather than later. Exchanges fail, close accounts and change their export formats, and our exchange reserve risk checklist explains why relying on one platform to hold both your coins and your records is a concentration risk in itself.

Edge Cases and Common Mistakes

Treating swaps as tax-free. The most common error in the UK, as in the US, is assuming that nothing happens until you cash out to pounds. Every swap is a disposal. Readers with US obligations as well can compare the treatment in our guide to US crypto taxes, where crypto is also property but the cost-matching method is completely different.

Using FIFO or specific identification. Many tax tools default to US-style methods. UK returns need the same-day, 30-day and pool order, so check the method setting before trusting any report.

Forgetting the 30-day rule when cutting losses. Selling to crystallise a loss and buying the same token back within 30 days means the disposal is matched against the new purchase, not the pool. The loss you meant to bank may shrink or disappear.

Fees in the wrong place. Fees for moving pounds in and out of an exchange are not allowable. Fees paid in tokens on a disposal are both a cost of the main sale and a small disposal in their own right (CRYPTO22280), and if the fee token is a different type from the one sold, HMRC expects two separate computations.

Assuming staking rewards are only taxed once. They are taxed as income when received and again, on any growth, when disposed of.

Claiming a loss for stolen tokens. HMRC's position is that theft is not a disposal, so there is no capital loss to claim. Victims should report the crime promptly and keep records, but should not expect a tax relief to soften the blow.

Gifting to family other than a spouse. A gift to an adult child is a disposal at market value for the giver.

Missing the £50,000 proceeds rule. Active traders with small net results are the people most likely to be caught by the reporting threshold.

Moving to self-custody and losing the history. Withdrawing to a wallet is not taxable, but it does separate your coins from the exchange's records. Keep the withdrawal records, because the pool cost travels with you.

Where to Go Next

If this guide has convinced you to rebuild your records, the most useful next read is our walkthrough on moving crypto from an exchange to a wallet you control: it explains the test-transaction and network checks that keep a transfer from becoming an unrecoverable loss, which, as the theft rules above show, HMRC will not let you deduct. For the other country guides and the US reporting forms, see the crypto taxes hub.

Frequently Asked Questions

Do I pay tax when I move crypto between my own wallets?

No tax arises from the move itself. HMRC's disposals page says there is no disposal when you keep beneficial ownership of the tokens throughout, which is the case when you move them between addresses or accounts you control. Keep the records, though, because the tokens keep their pooled cost, and a fee paid in tokens can raise its own questions.

Is swapping one cryptocurrency for another taxable in the UK?

Yes. Exchanging one token for another is listed by HMRC as a disposal of the token you gave up. You work out its sterling value at the time of the swap, match it under the same-day, 30-day and pool rules, and calculate a gain or loss as if you had sold it for pounds and immediately bought the new token.

Do I have to report crypto gains below the £3,000 allowance?

There is no tax to pay if your total taxable gains are under the allowance. GOV.UK says that if you are registered for Self Assessment you must still report gains when the total amount you sold assets for in the tax year was more than £50,000, for 2023-24 onwards. Losses follow their own rule: a loss has to be reported before you can use it.

How are crypto staking rewards taxed by HMRC?

Staking rewards are normally miscellaneous income, valued in pounds when you receive them, unless your activity amounts to a trade. When you later dispose of the reward tokens, Capital Gains Tax applies to the change in value after you received them, so the amount already taxed as income is not taxed twice.

Can I claim a tax loss if my crypto was stolen or I was scammed?

Generally not for theft. HMRC's manual says it does not consider theft to be a disposal, because you still own the asset and have a right to recover it, so no capital loss arises. People who paid for tokens and never received them may not be able to claim a loss either. If you received tokens that later became worthless, a negligible value claim may be available, unless they were already worthless when you got them.

What happens if I lose access to my wallet?

Losing a private key is not a disposal. If there is no prospect of recovering the key or the tokens, you may be able to make a negligible value claim, which treats the tokens as sold and reacquired at the value you state, possibly nil, and so crystallises a loss. For fungible tokens, the claim covers the whole pool for that token.

I did not report crypto gains in earlier years. What should I do?

HMRC's Cryptoasset Disclosure Service is the route for unpaid tax from earlier years. You calculate the tax, interest and penalties, disclose online and pay within 30 days of submitting. HMRC can look back 4 years where you took reasonable care, 6 where you did not, and 20 for deliberate underpayment. Gains from the current or previous tax year go on a normal Self Assessment return.

Does HMRC consider frequent crypto traders to be running a business?

Rarely. HMRC says it would expect individuals to be trading only in exceptional circumstances, judged on frequency, organisation and sophistication in the same way as share dealing. If your activity is a trade, Income Tax takes priority over Capital Gains Tax, but most active individuals remain investors in HMRC's eyes.

Sources

CryptosEyes publishes general information about how tax rules work, not tax, legal or investment advice. Rates, allowances and HMRC guidance change, and the right treatment of staking, DeFi or trading activity depends on your facts. For decisions about your own return, consult a qualified tax adviser or HMRC directly.