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UK guide · Updated 1 November 2026Bitcoin tax in the UK: the basics
HMRC does not treat Bitcoin as money. For most people it is an asset, like shares, so Capital Gains Tax can apply when you get rid of it. Buying and simply holding Bitcoin is not taxed. This page explains the basics in plain English.
General information, not tax advice. Rules and allowances change. Check the official guidance on GOV.UK: tax when you sell cryptoassets and speak to a qualified adviser about your own situation. Figures below were checked against GOV.UK on 1 November 2026.
When tax can apply
HMRC calls it a "disposal". You may need to pay Capital Gains Tax when you:
- sell Bitcoin for pounds
- swap Bitcoin for another crypto token
- spend Bitcoin on goods or services
- give Bitcoin away, unless it goes to your spouse, civil partner or a charity
Moving coins between your own wallets is not a disposal. Neither is buying and holding.
The tax-free allowance
Each tax year (6 April to 5 April) you have a Capital Gains Tax allowance, called the annual exempt amount. It is £3,000 for 2025 to 2026 and 2026 to 2027. It covers your total gains across all assets, not just Bitcoin. Gains above it are taxed at 18% or 24%, depending on your income. See GOV.UK: Capital Gains Tax rates and allowances.
How your gain is worked out
Your gain is roughly what you got for the Bitcoin minus what it cost you, including allowable fees. Because most people buy at many different prices, HMRC uses "pooling": you add up everything you paid for your Bitcoin and use the average cost when you sell part of it.
Two special rules come first. Coins bought on the same day as a sale, or within the 30 days after it, are matched with that sale instead of the pool. This stops people selling and buying straight back just to create a loss.
Losses
If you sell for less than you paid, the loss can be set against other gains. You need to report the loss to HMRC to use it, and you can carry it forward to later years.
When it can be Income Tax instead
If you are paid in Bitcoin by an employer, or you earn it from mining as a business, Income Tax and sometimes National Insurance can apply to the value when you receive it. See GOV.UK: tax when you receive cryptoassets.
Telling HMRC
If your gains are over the allowance you report them and pay the tax, usually through Self Assessment. The Self Assessment return now has its own cryptoasset section. You may also need to report if the total you sold for in the year is more than £50,000, even when your gain is below the allowance. If you owe tax from past years, HMRC has a disclosure service for unpaid crypto tax.
From 1 January 2026, UK crypto firms collect extra details from customers to share with HMRC under international reporting rules. Expect your exchange to ask for your tax details.
Keep good records
For every buy, sell, swap and gift, keep the date, the amount of Bitcoin, the value in pounds at the time, the fees and the wallet or exchange used. Download exchange statements regularly. Firms close and old accounts disappear.
Key takeaways
- Buying and holding Bitcoin is not taxed. Selling, swapping, spending and most gifts can be.
- The Capital Gains allowance is £3,000 a year across all your assets.
- Use average cost (pooling), with the same day and 30 day rules first.
- Keep records of everything. Check GOV.UK, and get advice if you are unsure.
Not financial advice. General education only. Bitcoin prices can swing hard. Never put in more than you can afford to lose, and do your own research.