Section 104 pooling and the 30-day rule — UK crypto tax
Quick answer: Group each token type into a pool with an average cost. When you sell, deduct a proportion of the pooled cost. If you buy the same token within 30 days of selling, special matching rules apply before the pool.
When you own the same type of crypto bought at different prices, HMRC does not use a simple first-in-first-out method. You must follow pooling and matching rules.
Section 104 pooling in plain English
Imagine you buy 1 bitcoin at £20,000 and later 1 bitcoin at £40,000. Your pool has 2 bitcoins costing £60,000 total — average £30,000 each. If you sell 1 bitcoin, your allowable cost is £30,000, not the price of the first or last purchase.
Match disposals in the right order
UK token matching · a sequence, not a choice
Apply the rules in order for the same token type and capacity. A purchase already matched to a disposal does not also enter the pool.
Read the diagram as text
- 01. Same day. Match eligible purchases on the disposal date.
- 02. Next 30 days. Then match eligible purchases in the following 30 days.
- 03. Section 104 pool. Use pooled allowable cost for the remaining units.
Source: HMRC token pooling guidance
Same-day and 30-day rules
If you sell and buy the same token on the same day, those transactions match first. If you sell and rebuy within 30 days, the rebuy can match the sale instead of the pool — this stops people selling at year-end for the allowance then immediately rebuying. HMRC's Cryptoassets Manual explains the calculation order.
Worked example: a partial 30-day match
Before selling, Morgan’s pool contains 10 ETH with a £10,000 allowable cost. Morgan sells 4 ETH for £8,000 and buys 1 ETH for £1,500 ten days later. Assume no same-day transactions, fees or other relevant acquisitions. Match 1 ETH to the £1,500 acquisition and 3 ETH to £3,000 of pooled cost. The gain is £3,500. The unmatched pool retains 7 ETH at £7,000; the matched repurchase does not enter it.
| Part of disposal | Units | Allowable cost |
|---|---|---|
| 30-day acquisition | 1 ETH | £1,500 |
| Section 104 pool | 3 ETH | £3,000 |
| Total | 4 ETH | £4,500 |
| Gain on £8,000 proceeds | — | £3,500 |
One pool across wallets, not one pool per exchange
Where the same type of token is held in the same capacity, changing exchange or wallet does not create a new pool. Unique NFTs and tokens with different rights need separate analysis. Check acquisition history across all accounts before relying on a per-exchange profit report.
Sources: HMRC: pooling
Frequently asked questions
Does swapping bitcoin for ethereum use pooling? +
Yes for the disposal — you sell bitcoin from its pool and acquire a new ethereum pool at the sterling value on the day of the swap.