Crypto is taxable in the UK. HMRC treats it as a digital asset, and depending on what you do with it, you could owe Capital Gains Tax, Income Tax, or both. This is not something to ignore – HMRC has been actively pursuing unpaid crypto tax since 2021.
The good news is that for most beginners, the amounts involved are small and the rules, once you understand them, are straightforward.
This guide is for information only. Tax rules can be complex and your personal situation may differ. If you are unsure, speak to a qualified accountant who understands crypto. HMRC also has detailed guidance at gov.uk.
You trigger a Capital Gains Tax (CGT) event whenever you dispose of cryptocurrency. Disposing means:
You calculate your gain by taking the sale price and subtracting what you originally paid (your cost basis). You pay CGT on the profit, not the full amount.
For the 2025/26 tax year, the Capital Gains Tax annual exempt amount is £3,000. If your total gains across all assets (not just crypto) are below this, you owe no CGT. Above it, basic rate taxpayers pay 18% on crypto gains and higher rate taxpayers pay 24%.
Some crypto activity is treated as income rather than a capital gain. You pay Income Tax at your normal rate on crypto you receive through:
The value at the point you receive the crypto is what counts as income.
Simply buying cryptocurrency is not a taxable event. You only trigger tax when you dispose of it.
HMRC expects you to keep records of every crypto transaction, including:
Most major exchanges let you download a transaction history. Keep these records for at least five years. If you have traded on multiple platforms, you will need records from all of them.
If you have made gains above the annual exempt amount, or if you have crypto income, you need to declare it via Self Assessment. If you do not normally file a tax return but have taxable crypto gains, you need to register for Self Assessment.
Failing to declare crypto gains is not a grey area. HMRC receives data from UK exchanges and has tools to identify undeclared crypto activity.
Several tools can help you calculate your crypto tax automatically by connecting to your exchange accounts. Koinly, CoinTracker, and Recap are popular options for UK users. They are not free, but they can save significant time if you have made many transactions.
Keep records from day one, even if your amounts are small. If you make gains above £3,000 in a tax year, you need to declare them. When in doubt, speak to an accountant – it is cheaper than an HMRC investigation.