HMRC treats crypto as property, not currency. That single decision drives the pooling rules, the 30-day rule and why swapping one token for another is a taxable event.
Nadia OkoroPolicy & Consumer Editor · Regulation, tax, stablecoins and the products retail users hold
HMRC taxes most crypto activity as capital gains: every disposal, including swapping one token for another and spending crypto, is a taxable event. Staking and mining rewards are usually income at the value received, then subject to capital gains on later disposal. Cost basis follows share pooling rules with same-day and 30-day matching. This is general information, not tax advice.
HMRC's position is set out in its Cryptoassets Manual, and the foundation is a single classification: crypto is property, not currency. Everything difficult about UK crypto tax follows from that, starting with the fact that swapping token A for token B is a disposal of A, taxable, even though no pounds moved.
This is general information about how the rules work, not advice on your situation. Where amounts are meaningful, an accountant who has done crypto returns before is worth their fee.
Four things: selling crypto for fiat, exchanging one cryptoasset for another, using crypto to pay for goods or services, and gifting it to anyone other than your spouse or civil partner.
The second and third catch people out. A swap from ETH to USDC crystallises a gain or loss on the ETH even though you never touched sterling. Spending crypto on a crypto card does the same thing on every transaction — which turns a card that spends volatile assets into a stream of small taxable disposals, and is the strongest argument for spending from a stablecoin balance instead.
Moving coins between your own wallets is not a disposal. Nor is buying crypto with fiat.
The UK does not use FIFO. Each token type goes into a section 104 pool holding the total quantity and total allowable cost, and a disposal takes a proportional slice of that pooled cost.
Two rules override the pool. Same-day: disposals match against acquisitions made the same day. Then the 30-day rule, sometimes called bed-and-breakfasting: a disposal matches against acquisitions in the following 30 days before touching the pool. This exists to stop you selling to realise a loss and buying straight back, and it catches ordinary traders constantly, because rebuying within a month is normal behaviour.
Allowable costs include the purchase price, exchange fees and transaction fees. They do not include the cost of the hardware wallet or your time.
Rewards from staking, mining, and most lending or yield arrangements are income when you receive them, valued in pounds at the moment of receipt. That value then becomes the cost basis for capital gains purposes when you later dispose of the tokens — so a single reward can be taxed twice in two different ways, once as income and once on the subsequent gain.
Airdrops split. Received in return for doing something — a service, a trade, promotional activity — they are income. Received with nothing given in return, they are usually not income at receipt, and the whole value falls into capital gains on disposal with a zero cost basis.
Liquid staking adds a wrinkle worth resolving early. A rebasing token whose balance grows continuously looks like a stream of receipts; a value-accruing token whose price rises instead may produce nothing until disposal. The treatment differs, the amounts differ materially, and HMRC's guidance on DeFi return is framed around whether beneficial ownership changes — which depends on the specific protocol.
Capital gains are reported through Self Assessment, with the annual exempt amount deducted first and the rate depending on your income band. Income from rewards goes in the income section. Both use the tax year to 5 April, and the filing deadline for online returns is 31 January following.
HMRC receives data from exchanges operating in the UK, and the international reporting frameworks now in force widen that considerably. Assume the data exists on the other side.
You need, per transaction: date, type, asset, quantity, value in pounds at the time, fees, and the counterparty or wallet. Reconstructing that after the fact across several exchanges and a few chains is the single most expensive mistake in crypto tax, and it is entirely avoidable.
Export from every exchange quarterly rather than annually, because access can end and history disappears with it. Keep wallet addresses in the same record so on-chain activity can be reconstructed independently. Portfolio tools help, but treat their output as a draft to check rather than a return to file — they mis-classify DeFi routinely.
Capital losses reduce gains in the same year and carry forward indefinitely if reported. Tokens that have become worthless can be the subject of a negligible value claim, which crystallises the loss without a disposal. Both require reporting to be usable later, so a year with heavy losses and no gains is still a year worth filing carefully.
The taxable events every new crypto holder needs to track from day one — trades, swaps, staking rewards and more — explained without the jargon.
Germany's treatment is unusually favourable and unusually specific. The whole framework turns on one date and on whether the activity stays private.
The headline is cashback. The cost is a conversion spread you cannot see, applied to every transaction, plus network FX on anything abroad.