Crypto Tax Calculator 2025/26

How HMRC Taxes Cryptocurrency in the UK

HM Revenue and Customs (HMRC) does not treat cryptocurrency as money or currency. Instead, it is classified as property, meaning the same Capital Gains Tax (CGT) rules that apply to shares and other assets also apply to Bitcoin, Ethereum, and all other cryptoassets. When you sell, swap, gift, or spend cryptocurrency that has increased in value since you acquired it, you create a disposal event that may trigger a CGT liability.

The UK was one of the first countries to publish detailed guidance on the taxation of cryptoassets. HMRC's Cryptoassets Manual (updated regularly) sets out how different types of crypto transactions are treated for tax purposes. The key principle is that every disposal of a cryptoasset is a potentially taxable event, and you must calculate the gain or loss in pounds sterling at the time of each transaction.

It is important to distinguish between Capital Gains Tax and Income Tax in the context of cryptocurrency. CGT applies when you dispose of crypto (selling, swapping, spending, or gifting). Income Tax applies when you receive crypto as payment for work, through mining, as staking rewards, through airdrops that are provided in return for a service, or as employment income. The two taxes have different rates, allowances, and reporting requirements.

Capital Gains Tax on Crypto Explained

The calculation of CGT on cryptocurrency follows the same basic steps as CGT on any other asset:

• Step 1: Calculate the gain by subtracting the cost basis (purchase price plus allowable costs) from the disposal proceeds (sale price minus selling costs).
• Step 2: Offset any capital losses from other disposals in the same tax year.
• Step 3: Deduct the annual exempt amount (£3,000 for 2025/26).
• Step 4: Apply the appropriate CGT rate based on your income level.

For cryptocurrency, the CGT rates are 10% for basic rate taxpayers and 20% for higher and additional rate taxpayers. These are the same rates that apply to shares and other non-property assets. The lower residential property rates (18% and 24%) do not apply to crypto. Your CGT rate depends on your total taxable income: if your salary and other income use up the basic rate band (up to £50,270), all of your crypto gains will be taxed at 20%.

Allowable costs that you can deduct from your crypto gains include exchange trading fees, withdrawal fees, gas fees (network transaction fees on blockchains like Ethereum), and any fees paid to platforms for executing trades. You should keep records of all fees paid, as they can significantly reduce your taxable gain over many transactions.

When You Need to Report Crypto to HMRC

You must report your cryptocurrency gains and losses to HMRC through Self Assessment if any of the following apply:

• Your total capital gains (from all sources, including crypto) before deducting losses exceed the annual exempt amount of £3,000
• Your total disposal proceeds from all assets exceed four times the annual exempt amount (£12,000 for 2025/26)
• You want to claim capital losses to carry forward for use against future gains

The reporting deadline for gains made in the 2025/26 tax year is 31 January 2027 (the Self Assessment filing deadline). Unlike UK residential property disposals, there is no requirement to report crypto gains within 60 days.

HMRC has invested significantly in crypto compliance. They have data-sharing agreements with major cryptocurrency exchanges operating in the UK, including Coinbase, Binance, and Kraken. HMRC has also issued "nudge letters" to individuals they believe may have undeclared crypto gains, and they have the power to request customer data from any exchange. Failure to report taxable gains can result in penalties of up to 100% of the unpaid tax, plus interest.

The Share Pooling Rules for Crypto

When you sell cryptocurrency, you need to determine the cost basis of the specific tokens you are selling. HMRC requires the use of share identification rules, which match disposals with acquisitions in a specific order:

• Same-day rule: Tokens sold are first matched with any tokens of the same type bought on the same day.
• Bed and breakfast rule (30-day rule): Remaining tokens are matched with any tokens bought within 30 days after the sale. This prevents you from selling and immediately rebuying to crystallise a gain or loss.
• Section 104 pool: Any remaining tokens are matched against your Section 104 pool, which is a running average cost of all tokens of that type that you hold (excluding those matched by the above rules).

Each type of cryptocurrency (Bitcoin, Ethereum, etc.) has its own separate Section 104 pool. The pool tracks the total number of tokens and their total allowable cost. When you buy more tokens, they are added to the pool. When you sell tokens, the proportionate cost is removed from the pool. This averaging method means you cannot cherry-pick which specific tokens you are selling to minimise your tax.

This calculator provides a simplified estimate based on a single purchase and sale. For users with multiple purchases at different prices, you would need to apply the share pooling rules to determine the correct cost basis for each disposal.

DeFi and Staking Tax Rules

Decentralised Finance (DeFi) creates unique challenges for crypto taxation. HMRC has published some guidance, but many areas remain grey. Here is the current understanding of how common DeFi activities are taxed:

Staking

Rewards received from staking (such as Ethereum staking) are generally treated as miscellaneous income, taxable at your marginal income tax rate when received. The market value of the tokens at the time you receive them becomes your cost basis for future CGT purposes. When you later sell the staking rewards, you pay CGT on any increase in value since you received them.

Liquidity Provision

Providing liquidity to decentralised exchanges (like Uniswap or Curve) typically involves depositing tokens into a pool and receiving LP tokens in return. This may or may not be treated as a disposal depending on the specific arrangement. If you swap tokens for LP tokens of a different type, it is likely a disposal. HMRC's guidance on DeFi lending and staking suggests that if the beneficial ownership of the original tokens passes to the protocol, a disposal has occurred.

Yield Farming

Returns from yield farming are typically treated as income when received, similar to staking rewards. This includes governance tokens received as farming rewards, interest from lending platforms, and rewards from liquidity mining programmes. Each receipt of tokens creates an income tax event at the market value on the date of receipt.

NFTs

Non-fungible tokens (NFTs) are treated as cryptoassets by HMRC. Creating (minting) and selling an NFT may be treated as trading income if done regularly, or as a capital disposal if it is an isolated transaction. Buying and later selling an NFT for a profit is subject to CGT in the same way as selling any other cryptoasset.

Record Keeping Requirements

HMRC requires you to keep records of all cryptocurrency transactions for at least five years after the Self Assessment filing deadline. For each transaction you should record:

• The type of cryptoasset (Bitcoin, Ethereum, etc.)
• The date of the transaction
• Whether you bought, sold, swapped, gifted, received, or spent the crypto
• The number of tokens involved
• The value in pounds sterling at the time of the transaction
• The cumulative total of tokens held after the transaction
• Any fees associated with the transaction (exchange fees, gas fees, etc.)
• The wallet address or exchange used

Many crypto investors use portfolio tracking tools or dedicated crypto tax software to automatically import transactions from exchanges and wallets. Popular options include Koinly, CryptoTaxCalculator, and Recap. These tools can generate tax reports compatible with UK Self Assessment requirements, including the correct application of share pooling rules.

If you have been trading crypto for several years without keeping records, you should reconstruct your transaction history as accurately as possible. Most exchanges allow you to download historical transaction data. For on-chain transactions, blockchain explorers (like Etherscan for Ethereum) can help you trace historical transfers and identify transaction amounts and dates.

What Changed in 2025/26

The 2025/26 tax year continues with the same crypto tax rules as 2024/25, but there are important developments to be aware of:

• Annual exempt amount stays at £3,000: The CGT annual exempt amount remains at the reduced level of £3,000, meaning more crypto gains are taxable compared to years prior to 2024/25.
• CGT rates unchanged: The crypto CGT rates remain at 10% (basic rate) and 20% (higher rate) for 2025/26.
• Crypto Asset Reporting Framework (CARF): The OECD's CARF requires crypto exchanges to report customer transaction data to tax authorities. The UK is implementing CARF, which will significantly increase HMRC's ability to identify unreported crypto gains.
• Increased HMRC enforcement: HMRC has expanded its dedicated crypto compliance team and continues to issue nudge letters and information requests to crypto exchanges operating in the UK.

Worked Examples

Example 1: Basic Rate Taxpayer Selling Bitcoin

Tom has a salary of £35,000 and bought 0.5 Bitcoin for £8,000 in 2022. He sells it in January 2026 for £22,000. His exchange charged £40 when buying and £55 when selling. He has no other capital gains or losses.

• Sale proceeds: £22,000
• Purchase price: £8,000
• Buying fees: £40
• Selling fees: £55
• Total gain: £22,000 - £8,000 - £40 - £55 = £13,905
• Annual exempt amount: £3,000
• Taxable gain: £13,905 - £3,000 = £10,905
• Basic rate band remaining: £50,270 - £35,000 = £15,270
• All within basic rate band at 10%: £10,905 x 10% = £1,090.50
• Net proceeds: £22,000 - £55 - £1,090.50 = £20,854.50

Example 2: Higher Rate Taxpayer with Losses

Sarah has a salary of £65,000 and sold Ethereum for £30,000 that she purchased for £12,000. She also has capital losses of £5,000 from a failed altcoin investment earlier in the year. Exchange fees were £100 total.

• Total gain: £30,000 - £12,000 - £100 = £17,900
• Losses offset: £5,000
• Gain after losses: £17,900 - £5,000 = £12,900
• Annual exempt amount: £3,000
• Taxable gain: £12,900 - £3,000 = £9,900
• Income exceeds £50,270 so all at higher rate (20%): £9,900 x 20% = £1,980

Example 3: Gain Spanning the Tax Band Boundary

James has a salary of £47,000 and sells crypto for a gain of £15,000 after fees. He has no other gains or losses.

• Taxable gain: £15,000 - £3,000 = £12,000
• Basic rate band remaining: £50,270 - £47,000 = £3,270
• Basic rate portion: £3,270 at 10% = £327
• Higher rate portion: £12,000 - £3,270 = £8,730 at 20% = £1,746
• Total CGT: £327 + £1,746 = £2,073

Common Mistakes with Crypto Tax

1. Thinking Crypto-to-Crypto Swaps Are Not Taxable

One of the most common mistakes is assuming that swapping one cryptocurrency for another (for example, trading Bitcoin for Ethereum) is not a taxable event. Every swap is treated by HMRC as selling the first crypto and buying the second. You must calculate the gain or loss on the first crypto based on its market value at the time of the swap. This can create tax liabilities even when you have not converted back to pounds sterling.

2. Not Tracking Gas Fees and Exchange Fees

Transaction fees are allowable costs that reduce your taxable gain. Over many transactions, gas fees on Ethereum and other networks can add up significantly. Failing to track and deduct these fees means you may overpay CGT. Keep records of all fees paid on every transaction, including network gas fees, exchange trading fees, and withdrawal fees.

3. Using FIFO Instead of Share Pooling

Some other countries use First In, First Out (FIFO) for crypto cost basis calculations. The UK requires the share pooling method (same-day rule, 30-day rule, then Section 104 pool). Using FIFO instead of share pooling will produce incorrect results and could lead to over or underpayment of tax. Make sure any tax software you use is configured for UK rules.

4. Ignoring the 30-Day Rule

If you sell crypto and repurchase the same token within 30 days, the bed and breakfast rule applies. The gain or loss is calculated using the repurchase price, not the original pool cost. This prevents tax-loss harvesting by selling and immediately rebuying. To validly crystallise a loss, you must wait at least 31 days before repurchasing the same token.

5. Not Reporting Because Gains Are "Small"

Some people assume small gains do not need to be reported. You must report if your total disposal proceeds exceed £12,000 or your gains exceed £3,000 in the tax year, even if no tax is due after deducting losses and the annual exemption. HMRC is increasingly able to identify unreported crypto activity through exchange data sharing. Late or missing returns result in penalties and interest.