Selling, Swapping or Spending Bitcoin: The UK Tax Sources

Explains when Capital Gains Tax may be due on selling, exchanging, spending or giving away cryptoassets, and how to work out gains, pool costs, keep records and report.

Explains how tokens of each type are held in a section 104 pool for Capital Gains Tax and how the same-day and 30-day matching rules apply.

Notes for completing the 2025-26 Capital Gains summary pages, including the dedicated cryptoassets section in boxes 13.1 to 13.8.

Contents of the manual's individuals section, covering which taxes apply, trading, Income Tax, Capital Gains Tax, valuation, stamp duties, Inheritance Tax and pension contributions.

Explains the identifying details individuals and entities must give to cryptoasset service providers under the Cryptoasset Reporting Framework.

An exchange reads the history of the coins you deposit, not just the balance. What screening does, why it is widening, and where it leaves the holder.

How a flag is generated, what a review consists of, why nobody will tell you what triggered it, and how to structure holdings so one flag can't reach everything.

Describes HMRC's voluntary disclosure service for unpaid tax on cryptoassets, including calculating tax, interest and penalties and submitting a disclosure.

Sets out why individuals must keep their own cryptoasset records, the wallet, exchange and bank evidence that counts, and the transaction details HMRC expects to see in an enquiry.

Sets out which taxes apply to individuals holding cryptoassets: Capital Gains Tax on disposals, Income Tax and National Insurance on employment, mining or airdrop receipts, and Income Tax where a trade exists.

Explains why tokens count as a chargeable asset for Capital Gains Tax, and HMRC's expectation that an individual's buying and selling will normally be investment activity rather than trading.

Explains what counts as a disposal of tokens for Capital Gains Tax, including selling, swapping, spending and gifting, and what does not, such as moving tokens between own wallets.

Covers HMRC's view on whether moving tokens between distributed ledgers is a Capital Gains Tax disposal, including how one-way transfers carry allowable costs across to the second cryptoasset.

Lists which costs HMRC regards as allowable when calculating Capital Gains Tax on token disposals, including how exchange fees, swap fees and mining costs are treated under section 38 TCGA 1992.

Works through a basic section 104 pool example, showing pooled cost building up across two purchases and a proportion of that cost being deducted on a part sale.

Works through a pooling example where same-day acquisitions and disposals are matched first, showing the resulting gain and how unmatched tokens and their cost are added to the section 104 pool.

Works through an example of the 30 day matching rule, showing how acquisitions after two disposals are matched, gains calculated and unmatched tokens added to the section 104 pool.

Works through an example of how the same day rule applies alongside a part disposal of a section 104 pool when several acquisitions and disposals occur on one day.

Works through an example of how the 30 day rule interacts with a section 104 pool, where tokens bought within 30 days of a sale are matched before the pool.

Works through a pooling example in which the same day rule, the 30 day rule and part disposals of the section 104 pool interact, with the gains, losses and closing pool shown.

Works through an example of crypto-to-crypto exchanges affecting two section 104 pools at once, applying same-day, 30 day and pooling rules to calculate gains and losses on each disposal.

Explains HMRC's treatment of transaction fees paid in tokens as a separate disposal at market value as well as a cost, with a worked example of the resulting computations.

Describes how soft and hard forks work and HMRC's treatment of new tokens, including section 43 TCGA, a separate section 104 pool, cost apportionment and negligible value claims.

Describes HMRC's treatment of airdropped tokens for Capital Gains Tax, covering which section 104 pool they enter and why section 43 TCGA 1992 does not apply to them.

Sets out how a negligible value claim under section 24 treats worthless tokens as disposed of and reacquired, made for the whole section 104 pool, and what the claim must state.

States HMRC's position that cryptoassets are not currency or money, so sections 252 and 269 of the Taxation of Chargeable Gains Act 1992 do not apply to them.

Covers how gains and losses on cryptoassets must be converted into pound sterling, including establishing an exchange rate for crypto-to-crypto trades and keeping details of the valuation method.

Sets out who is liable to Corporation Tax or Capital Gains Tax on gains from exchange tokens held as an investment, and why tokens count as chargeable assets.

Describes what counts as a disposal of exchange tokens for Corporation Tax on chargeable gains, including swaps, gifts and wallet transfers, mixer use, and disposals to charity.

Describes HMRC's view that swapping tokens across ledgers may be a disposal depending on the facts, and that one-way transfers such as ether to the Beacon Chain fall under section 43 TCGA.

Lists the costs HMRC treats as allowable under section 38 TCGA 1992 when calculating token gains, including how exchange fees, token swaps and mining costs are treated.

Explains how section 104 pooling applies to exchange tokens held by companies, with separate pools per token type, and the same-day and nine-day exceptions, illustrated by worked examples.

Explains how soft and hard forks work and HMRC's treatment of new tokens from a hard fork, including section 104 pool splitting, cost apportionment and negligible value claims.

Covers whether sale and repurchase or securities lending rules in sections 263A and 263B TCGA 1992 can apply to DeFi lending, noting HMRC's position that tokens will generally not be securities.

Describes when making a DeFi loan or stake is a Capital Gains disposal because beneficial ownership passes, and how deferred consideration is valued under sections 48(1) and 37 TCGA 1992.

Explains HMRC's view that borrowing tokens is an acquisition, with the borrower's obligation to return tokens valued as the acquisition cost, citing Chaney v Watkis.

Covers whether giving tokens as DeFi loan collateral is a disposal, depending on the platform's terms, and the Capital Gains Tax treatment of withdrawal, liquidation and section 26 TCGA.

Explains the Capital Gains Tax consequences for borrowers and lenders when a DeFi loan is satisfied or a stake is withdrawn, including section 48 and section 22 TCGA 1992 treatment.

Works through a Capital Gains example of lending 100 tokens for a fixed period, where section 48(1) TCGA 1992 brings the known future quantity into the computation immediately, producing a loss.

Works through an example of a token loan with a 5% return, showing how the full future repayment enters the Capital Gains computation while the return is taxed as income.

Works through an example of a token loan with no fixed end date, showing how section 48(1) TCGA brings the principal in and a right to future returns is valued.

Works through a Capital Gains Tax example of an individual transferring tokens to a DeFi lending platform for a liquidity token, apportioning value across tokens and adjusting section 104 pools.

Works through a Capital Gains example where a lender's collateral is partly liquidated, including a penalty token, showing the gain calculated and the resulting adjustment to the section 104 pool.

Works through an example of a borrower repaying a token loan with its return, showing the chargeable gain on tokens transferred and the adjustment to the section 104 pool.

Works through an example of a fixed-term token loan with a 5% return, showing how section 48 TCGA brings the repayment in and section 37 excludes the income element.

Works through an example of a lender whose loan of an ascertainable token quantity is satisfied after the tokens fell in value, showing income on the return and the capital loss.

Works through a Capital Gains example of an open-ended token loan with a percentage return, valuing the unascertainable right and treating extra tokens received on repayment as miscellaneous income.

Works through an example of exchanging two tokens for liquidity provider tokens, then later redeeming them, showing gain computations, apportioned values and section 104 pool adjustments.