HMRC's view of cryptoassets is settled and has been for several years: they are property, not currency, and for almost every individual they are taxed under Capital Gains Tax on disposal and income tax on rewards. What is not settled in most holders' minds is how much of their activity counts as a disposal, how the gain is calculated across hundreds of trades, and what HMRC can now see. This guide answers those questions for 2026/27.
What is a disposal
Selling crypto for pounds is a disposal, obviously. So is swapping one token for another, which is the one most holders miss: a trade from one coin to a second coin is a disposal of the first at its sterling value on the day, and an acquisition of the second at the same value. Spending crypto on goods or services is a disposal. Gifting crypto to anyone other than a spouse or civil partner is a disposal at market value. Depositing into most DeFi protocols where you give up beneficial ownership of the tokens is a disposal. Transferring between your own wallets or accounts is not a disposal and must be identified so that it is excluded, which is where exchange-generated tax reports usually go wrong.
Calculating the gain
The gain on each disposal is the sterling proceeds less the allowable cost, including transaction and gas fees. Because people buy the same token repeatedly at different prices, HMRC applies the share-matching rules adapted for crypto. A disposal is matched first against any units of the same token acquired on the same day, then against units acquired in the following 30 days, a rule designed to stop selling and immediately rebuying to crystallise a loss, and only then against the section 104 pool, which holds all other units of that token at their average cost. Every token has its own pool, and the pool cost of what you hold today depends on every purchase you have ever made.
At any real volume this computation cannot be done accurately by hand. It requires the complete transaction history from every exchange and wallet you have ever used, including closed accounts, imported and matched across all of them. Incomplete history produces wrong pool costs for everything that follows.
Rates and allowance
Gains above the £3,000 annual exempt amount are taxed at 18% to the extent they fall within your unused basic rate band and 24% above it. Losses in the year are set against gains automatically, and unused losses can be carried forward indefinitely provided they are claimed on a return within four years of the tax year in which they arose. Transfers between spouses are at no gain and no loss, which allows two exemptions to be used on a planned disposal.
Income from crypto
Rewards from staking, lending, liquidity provision and most DeFi protocols, mining income, and airdrops received in return for doing something are income when received, valued in sterling on the day and taxed at your marginal income tax rate as miscellaneous income, unless the activity amounts to a trade, which HMRC accepts only rarely and on a high evidential bar. The tokens received then enter your pool at that value, so a later sale produces a capital gain or loss on the movement since. Airdrops received for nothing, with no action on your part, are not income on receipt but have a nil cost in the pool.
NFTs
Each NFT is a separate asset, so pooling does not apply; the gain is proceeds less the cost of that specific token including gas. Creating and selling NFTs regularly may be trading income. Royalties received on resales are income.
Losses, collapses and worthless tokens
If a token has become worthless you can make a negligible value claim, treating it as disposed of for nothing and crystallising the loss. If an exchange has collapsed and your tokens are inaccessible but still exist, the position is harder; a negligible value claim may be available once the asset is effectively worthless, and where the exchange is in administration you may need to wait for the outcome. Being the victim of fraud or theft is generally not a disposal and produces no loss, unless the tokens themselves have become worthless.
What HMRC can see
UK exchanges have provided customer data to HMRC for years. From January 2026 the Cryptoasset Reporting Framework requires exchanges and service providers worldwide to collect and report customer identity and transaction data to the tax authority where the customer is resident, so overseas platforms are now visible too. HMRC's nudge letters to holders whose returns do not match the data have increased sharply. A nudge letter asks you to check and correct, and signing its certificate falsely is serious; the right response is to prepare the full computation first.
Reporting
If your total disposals exceed £50,000 in the year, your gains exceed the £3,000 allowance, or you have taxable crypto income, you must register for Self Assessment by 5 October after the tax year and file by 31 January. Since 2024/25 the return has a dedicated cryptoasset section within the capital gains pages. Where earlier years were under-reported, a voluntary disclosure before HMRC asks is penalised far more lightly than a discovery.
Records
Keep for every transaction the date, the type, the token and quantity, the sterling value at the time, the counter-asset, the fees, the wallet or exchange, and the purpose. Exchanges delete history after accounts close, so export it regularly. HMRC can ask for records going back to your first transaction because the pool cost depends on all of it.
Getting it done
Our crypto tax report is £199 for up to 500 transactions across all platforms, £279 with the Self Assessment filed, £399 for higher volumes and £249 for a response to an HMRC letter including the report and the reply. It lists every disposal, every income event and the pool position of every asset, with the figures for the return and the reasoning explained.
A worked example
An investor bought 2 ETH in 2021 for £2,800, 1 ETH in 2023 for £1,500 and 1 ETH in May 2026 for £2,000, a pool of 4 ETH at a cost of £6,300, or £1,575 each. In June 2026 she swapped 1.5 ETH for a stablecoin when ETH was worth £2,400. That is a disposal of 1.5 ETH for £3,600 against a pooled cost of £2,362.50, a gain of £1,237.50. In the same year she received £400 of staking rewards, income at her marginal rate, and the staked tokens entered the pool at £400. Her total gains for the year were under the £3,000 exemption, so no Capital Gains Tax was due, but her disposals across the year exceeded £50,000 in sterling terms because she traded actively, so a return was required and the £400 of income was taxable on it.
Disclosure of earlier years
Where previous years were not reported, HMRC's position is that an unprompted disclosure attracts penalties at the bottom of the range, often nil for careless errors, and that a disclosure after a nudge letter is treated as prompted, with higher penalties. The computation for earlier years requires the same complete history, and once the pool costs are established for all years the returns can be amended or filed together. The worst course is to ignore a letter; the second worst is to sign HMRC's certificate that nothing is owed without having done the arithmetic.