How crypto tax works in United Kingdom
HMRC treats exchange tokens as property, so selling crypto for sterling, swapping tokens, spending coins on goods, or gifting them away from a spouse is normally a Capital Gains Tax disposal.
Most individuals pay the main CGT rates of 18% within the basic-rate band and 24% above it, after the GBP 3,000 annual exempt amount, with pooled Section 104 costs tracking the base.
Frequent, organised, profit-seeking activity can be taxed as trading income instead, while mining, validation, airdrops received as rewards, and DeFi returns with the character of income fall under Income Tax.
Tax rates at a glance
- Crypto CGT
- 18% / 24%
- Main CGT lower rate
- 18%
- Main CGT higher rate
- 24%
- Annual exempt amount
- GBP 3,000
- Trading profits
- 20% - 45%
- Staking and DeFi income
- Income Tax
- Gifts to a spouse
- No disposal
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Long-term holdersExpatsFreelancers paid in cryptoFoundersCross-border investors
Watch out for
- The annual exempt amount is now GBP 3,000, far below historic levels, so even modest realised gains need calculation and reporting through Self Assessment.
- Crypto location follows the beneficial owner's residence in HMRC's view, which keeps UK residents in charge to UK tax on disposals and complicates non-dom planning.
- Employer-paid crypto, liquid staking yields, and liquidity-pool returns each need characterisation first, because the income-versus-capital answer changes the whole return.
- Leaving the UK does not automatically clean the slate: temporary non-residence rules can claw back gains realised during short absences.
Frequently asked questions
How is crypto taxed in the UK?
Most investors pay Capital Gains Tax at 18% or 24% on disposals above the annual exempt amount. Trading, mining, employment rewards, and income-character DeFi returns are taxed as income instead.
Is moving crypto between my own wallets taxable?
No. HMRC confirms there is no disposal when beneficial ownership stays with you, such as moving tokens between addresses you control.
Do I pay tax swapping one crypto for another?
Yes. Token-for-token exchanges are disposals of the token given up, measured in sterling against pooled costs, even though no cash changes hands.