Tax on cryptoassets in 2026/27: when Capital Gains Tax and Income Tax apply

Selling, swapping or spending cryptoassets can trigger Capital Gains Tax, and some crypto earnings count as income. This guide explains the HMRC rules, the 2026/27 figures, a worked example and the record-keeping HMRC expects.

What counts as a taxable event

Cryptoassets, such as bitcoin and other exchange tokens, are not money in the eyes of HMRC; they are treated as assets, rather like shares or a painting. Buying tokens with pounds is not taxed. The tax question arises when you dispose of them, which HMRC says includes selling them, exchanging one token for another, using them to pay for goods or services, or giving them away. The exchange of one token for another surprises many people, because no pounds change hands, yet the gain or loss is still worked out in sterling. Gifts to a spouse, civil partner or charity are generally excluded. Simply holding tokens, or moving them between your own wallets, is not a disposal.

Capital Gains Tax: the figures for 2026/27

Capital Gains Tax (CGT) is charged on the profit from a disposal, not on the amount you receive. Your gain is usually what you sold the asset for minus what you paid, and allowable costs such as transaction fees and valuation costs can be deducted. For gains from 6 April 2026, GOV.UK gives an annual exempt amount of £3,000: gains below that total across all your assets in the tax year (6 April to 5 April) are not taxed. Above it, gains are taxed at 18% to the extent they fall within your remaining basic rate band, which GOV.UK gives as £37,700 for this year, and at 24% on anything above that. Higher and additional rate taxpayers pay 24%.

How the cost of your tokens is worked out

HMRC does not let you simply pick which tokens you sold. Instead, each type of token is grouped into a pool, a running total of how many you hold and what they cost in all, and you use the average cost per token in that pool. Two matching rules sit on top. Tokens bought on the same day as you sell the same type are matched first, and tokens bought within the following 30 days are matched next, before the pool is used. These rules stop people selling at a loss and buying straight back to create a tax loss. Because each type of token has its own pool, someone trading several tokens needs separate records for each.

A worked example

Here is an illustration with made-up figures. Suppose someone buys 2 tokens at £1,000 each, so £2,000 in total, and later buys 1 more for £1,600. The pool now holds 3 tokens costing £3,600 in all, an average of £3,600 divided by 3, or £1,200 each. They later sell 1 token for £2,000. The cost taken from the pool is £1,200, so the gain is £2,000 minus £1,200, which is £800. The pool then holds 2 tokens with a cost of £2,400. That £800 is below the £3,000 allowance, so on its own it would not create a tax bill, though it would still go in the records.

Now suppose that across the whole 2026/27 tax year the same person's total gains, from crypto and anything else, come to £5,000. Taking off the £3,000 allowance leaves £2,000 taxable. If all of it falls in the higher rate band, 24% of £2,000 is £480. If it all fell within the basic rate band, 18% of £2,000 is £360. These figures are illustrative only; real bills depend on other income, allowable costs and any losses.

Losses and Income Tax

If you sell for less than the pooled cost, the result is an allowable loss, but it only helps if you report it. GOV.UK says a loss is first set against gains in the same tax year, then unused losses from earlier years can reduce a gain still above the allowance, and what remains can be carried forward. A loss can be claimed up to 4 years after the end of the tax year of the disposal. Income Tax is a separate matter. HMRC's guidance says tokens from mining, staking or lending outside a trade are treated as other taxable income, and there is a £1,000 combined allowance for trading and miscellaneous income. Tokens paid by an employer count as earnings subject to Income Tax and National Insurance. If you later sell tokens you were already taxed on as income, CGT applies only to any increase in value since you received them.

Records, reporting and common mistakes

• HMRC says you must keep your own records of each transaction; exchange reports can help but do not calculate tax or pooled costs
• Useful details include the type of token, the date, the number involved, the value in pounds sterling and bank statements
• Gains are reported on a Self Assessment return, which has a cryptoasset section for 2024/25 onwards, or through the CGT real time service
• Assuming that swapping one token for another is not taxable is a common error, as is forgetting fees, which can be allowable costs
• HMRC guidance (updated 1 January 2026) says UK cryptoasset providers collect your name, date of birth, address and tax identification number; HMRC says giving inaccurate details, or none, to a UK provider can bring a penalty of up to £300

If tax from earlier years turns out to be unpaid, HMRC has an online service for telling it about unpaid cryptoasset tax. HMRC's guidance sets the maximum number of years to disclose at 4 where reasonable care was taken, 6 where it was not, and 20 for deliberate underpayment, plus interest and possible penalties. This guide does not cover trading as a business, or the rules for overseas residents. CGT rates apply across the UK; Scotland has its own Income Tax rates, which do not change the CGT rates above.

The FCA states that cryptoassets are not FSCS protected and that buyers should be prepared to lose all the money they invest. That is separate from tax, but it is worth knowing alongside it. Free, impartial help with tax questions is available from HMRC and, for wider money questions, from MoneyHelper.

Check before you act

Tax rules, allowances and rates change, and HMRC's guidance on cryptoassets is updated regularly. Please confirm the figures on the official pages linked below before relying on them, and consider asking HMRC or a qualified tax adviser about your own circumstances.

Sources

• GOV.UK, Check if you need to pay tax when you sell cryptoassets
• GOV.UK, Check if you need to pay tax when you receive cryptoassets
• GOV.UK, Capital Gains Tax rates and allowances
• GOV.UK, Capital Gains Tax: work out if you need to pay
• GOV.UK, Capital Gains Tax losses
• GOV.UK, Information you will need to give to UK cryptoasset service providers
• GOV.UK, Tell HMRC about unpaid tax on cryptoassets
• Financial Conduct Authority, FCA reminds consumers of the risks of investing in cryptoassets