Most people pay capital gains tax when they sell, swap or spend crypto, and income tax on rewards such as staking and mining. Since 1 January 2026, crypto exchanges and similar platforms operating in the UK have had to collect each customer's name, address, date of birth and National Insurance number or Unique Taxpayer Reference (UTR), and record their transactions. The first reports, covering calendar year 2026, reach HMRC between 1 January and 31 May 2027. Overseas platforms in countries that have signed up to the same rules will pass data to HMRC through their own tax authorities. If you have undeclared crypto gains or income, putting it right before HMRC receives the data usually costs less.
The Cryptoasset Reporting Framework in plain terms
The Cryptoasset Reporting Framework (CARF) is an OECD standard. The UK has gone further than the basic model: UK platforms must report on UK resident customers too, so HMRC gets domestic data directly.
For each user, the report will show identifying details and a summary of their activity for the year by token and transaction type, which HMRC will match to tax records.
You have obligations too. You must give accurate details to every platform you use, including those based abroad. If you give a UK platform wrong information, or none, you could face a penalty of up to £300.
When crypto is taxed as a capital gain
For most individuals, crypto is an investment and is taxed under capital gains tax. A taxable event (a "disposal") happens when you:
- sell tokens for pounds or another currency;
- swap one token for a different one, including into a stablecoin;
- spend tokens on goods or services; or
- give tokens away, unless the recipient is your spouse, civil partner or a charity.
Swaps catch people out most: bitcoin to ether, or into a stablecoin, is a disposal at that moment's sterling value, though no money reaches your bank. Moving tokens between wallets you own is not a disposal.
Cost is worked out using the same matching rules as shares. Tokens bought on the same day as a sale are matched first, then tokens bought in the following 30 days, and everything else sits in a "section 104 pool" for that token at an average cost. Each type of token has its own pool. NFTs are the exception: each one is a separate asset and is not pooled. Exchange reports do not track your pool for you. We explain the matching rules in more detail on our share pooling page.
| Capital gains tax on crypto | 2025/26 and 2026/27 |
|---|---|
| Annual exempt amount | £3,000 |
| Rate on gains within the basic rate band | 18% |
| Rate on gains above it | 24% |
| Report on the return, even with no tax due, if total disposal proceeds exceed | £50,000 (if registered for Self Assessment) |
The £50,000 test looks at what you sold for, not your profit. Since the 2024/25 return, Self Assessment has had a dedicated crypto section where gains must be entered in sterling.
When crypto is taxed as income
Some receipts are income at the point you receive them, valued in pounds at that date:
- Mining and staking rewards: usually miscellaneous income, unless the activity is organised and commercial enough to be a trade.
- Airdrops: taxable as income if you did something to get them, or they came in return for a service. A purely unsolicited airdrop is generally not income, though capital gains tax can still arise on a later sale.
- Pay from an employer: taxed as employment income. Exchange tokens such as bitcoin count as readily convertible assets, so a UK employer should run tax and National Insurance through PAYE.
The £1,000 trading and miscellaneous income allowance can cover small amounts. When you later sell tokens that have already been taxed as income, that value forms part of your cost, so you are not taxed twice on it.
Losses, collapsed tokens and lost keys
Losses must be claimed within four years of the end of the tax year of disposal. Unclaimed losses from a bad 2022/23 year, for example, must be claimed by 5 April 2027.
If a token has collapsed but you still hold it, a negligible value claim treats you as selling and buying it back at its near-nil value, crystallising the loss. For crypto, HMRC expects the claim to cover the whole pool of that token. The deemed sale can be backdated to any date within the two tax years before the year you claim, provided the token was already of negligible value then. Losing a private key is not a disposal in itself, but if there is no realistic prospect of recovering access, a negligible value claim may be possible.
If you have not declared crypto gains or income
HMRC has been writing to people it believes hold crypto, and its data will grow sharply from 2027.
HMRC's online cryptoasset disclosure service is the route for unpaid tax from earlier years. You calculate the tax, interest and penalty and make an offer. The years covered depend on your behaviour: 4 years if you took reasonable care, up to 6 if you were careless, and up to 20 if the underpayment was deliberate. If you never registered for Self Assessment when you needed to, HMRC can go back up to 20 years even where that was not deliberate, and an unprompted disclosure only carries no penalty if HMRC learns of it within 12 months of the tax falling due; after that the minimum is 10%. Current and recent years go on your tax return instead.
Penalties for a careless error disclosed before HMRC has any reason to raise it can be reduced to nil. Once HMRC has prompted you, the minimum rises. HMRC's own guidance treats a disclosure as prompted where it already holds the information through an automatic exchange agreement and you had reason to know that, and CARF creates that position.
If you have had a letter, do not ignore it or sign anything without checking. Our HMRC enquiries page explains how we deal with letters and disclosures.
What to do now
- Download your full history from every exchange and wallet you have used, including closed accounts.
- Rebuild your pools for each token, applying the same-day and 30-day rules, and keep the workings.
- Check the 2025/26 return due by 31 January 2027: crypto gains above £3,000, proceeds over £50,000, or staking and mining income all need to go on it.
- Claim old losses before the four-year limit, and consider negligible value claims for dead tokens.
- Fix past years before the data arrives. An unprompted disclosure in 2026 is likely to cost less than answering HMRC questions in 2027 or later.
- Read our Budget checklist if you are thinking about realising gains this year, and see our personal tax service for ongoing returns.
This article explains tax rules and is not investment advice. If you are unsure where you stand, book a consultation and we will review your position with you.
This article is general information about UK tax, based on the law and HMRC practice at the date shown above. It is not advice, and reading it does not make you our client. Tax rules change and their effect depends on your circumstances, so please speak to us before acting on it.