How cryptoassets are taxed in the UK — overview
Quick answer: You may owe tax when you sell, swap or spend crypto and make a profit. You may also owe tax if you receive crypto as pay or rewards. You need to keep your own records. Many people report through Self Assessment each January.
HMRC — the UK tax authority — treats most crypto like property you sell at a profit, not like pocket money. This guide explains when tax might apply, in plain English. If you only bought a small amount and still hold it, you may not owe anything yet.
What HMRC means by 'cryptoassets'
In HMRC's language, a cryptoasset is a digital item of value you can trade online — bitcoin is the most famous. HMRC does not treat it as foreign currency. It treats it more like an asset you might sell at a profit, similar in principle to shares.
When you might owe Capital Gains Tax
Capital Gains Tax (CGT) may apply when you 'dispose' of crypto — that means selling it for pounds, swapping it for another token, using it to buy something, or giving it away (except to a spouse, civil partner or charity). You only pay tax on the profit, not the full amount. If your total gains in the tax year are below £3,000 (2025/26), you may have nothing to pay — but you might still need to report in some cases.
When you might owe Income Tax
If your employer pays you in crypto, or you receive rewards from mining or staking, HMRC may treat that as income — like being paid in cash. You would pay Income Tax through the usual routes (PAYE or Self Assessment).
Keeping records — what to write down
For each transaction, note: the date, type of token, how many, value in pounds at the time, fees, and what you did (bought, sold, swapped). A simple spreadsheet is fine. HMRC can ask to see these records up to several years later.
How to tell HMRC
Many people use Self Assessment — the annual tax return due by 31 January after the tax year ends. There is now a section specifically for crypto. If you are unsure whether you need to register, check gov.uk or consider speaking to an accountant — not a social media influencer.
Frequently asked questions
Do I pay tax if I only swap one crypto for another?+
Yes. Swapping tokens is a disposal for CGT purposes. You calculate the gain or loss in pound sterling at the time of the exchange.
Is there a tax-free allowance for crypto?+
Gains are covered by the general CGT annual exempt amount (£3,000 for 2025/26). There is no separate crypto-specific allowance.
Does HMRC know about my crypto?+
From January 2026, UK cryptoasset service providers must report customer data to HMRC under the Cryptoasset Reporting Regime. You remain responsible for reporting your own tax correctly.