UK Crypto Tax Calculator — CGT with £3,000 Annual Exempt Amount

How HMRC Taxes Cryptocurrency in the United Kingdom

HM Revenue & Customs (HMRC) published its definitive Cryptoassets Manual in 2019, establishing that cryptocurrencies are treated as capital assets for the purposes of Capital Gains Tax (CGT). This means that every time you dispose of cryptocurrency — whether by selling for sterling, trading for another digital asset, using crypto to pay for something, or gifting it to anyone other than your spouse or civil partner — you must calculate and potentially pay Capital Gains Tax on any gain you realise.

The UK system is notable for two features that distinguish it from most other jurisdictions: mandatory share pooling under Section 104 TCGA 1992, which prevents you from cherry-picking high-cost lots; and the 30-day bed and breakfasting rule, which prevents rapid sell-and-rebuy strategies to crystallise tax losses.

Section 104 Share Pooling: How UK Crypto Cost Basis Works

Under HMRC's guidance, each type of cryptocurrency you own is treated as a single pool of assets. When you buy more of the same crypto, the cost is added to the pool. When you sell some, you calculate the proportion of the pool you are disposing of and use the proportional cost as your basis.

Example: You buy 1 BTC at £20,000 and later buy another 1 BTC at £28,000. Your Section 104 pool now contains 2 BTC at a total cost of £48,000 — an average cost of £24,000 per BTC. If you then sell 1 BTC at £35,000, your gain is £35,000 − £24,000 = £11,000. You cannot choose to use the £28,000 lot to give yourself a smaller gain of £7,000; the pool average is mandatory.

The Annual Exempt Amount: Your Tax-Free Allowance

Every UK individual receives an Annual Exempt Amount (AEA) — a threshold of capital gains that can be realised tax-free each year. For 2024/25, this is £3,000. The AEA has been drastically reduced in recent years from £12,300 in 2022/23. This allowance applies to all your capital gains across all assets (crypto, shares, second properties), not just crypto alone.

Strategic use of the AEA involves planning your disposals across tax years to ensure you do not waste the allowance. If you have gains approaching the threshold, consider delaying additional disposals to the new tax year (which begins 6 April) to benefit from a fresh AEA. Married couples can also transfer assets between spouses at no gain/no loss, effectively doubling the available exemption.

CGT Rates for Crypto in 2024/25: 10% and 20%

Unlike property (which attracts 18%/24% after the 2024 Autumn Budget changes), cryptocurrency capital gains are taxed at 10% for basic rate taxpayers and 20% for higher and additional rate taxpayers. Whether your gains fall into the basic or higher rate band depends on your total income plus gains relative to the basic rate threshold.

Example calculation: Your employment income is £40,000. The basic rate band extends to £50,270. You have £10,270 of basic rate band remaining (£50,270 − £40,000). You make a crypto gain of £15,000, of which £12,000 is taxable after the £3,000 AEA. The first £10,270 is taxed at 10% = £1,027. The remaining £1,730 is taxed at 20% = £346. Total CGT = £1,373.

The 30-Day Bed and Breakfasting Rule

If you sell cryptocurrency and then rebuy the same cryptocurrency within 30 days, HMRC requires the disposal to be matched against the new acquisition, not the Section 104 pool. This prevents you from harvesting a paper loss by selling and immediately repurchasing while retaining exposure to the asset.

To harvest losses legitimately, you must either wait more than 30 days before rebuying, or alternatively purchase a correlated but different asset (for example, selling Bitcoin and buying Ethereum, which are separate assets and therefore the rule does not apply). After 30 days, you can rebuy the original asset and the disposal will have been matched against your pool.

Filing Crypto Taxes via Self Assessment

If your total crypto disposal proceeds exceed four times the AEA (£12,000 in 2024/25), or if your gains exceed the £3,000 AEA, you must file a Self Assessment tax return. Even if you have no tax to pay because losses exceed gains, you should report losses to HMRC within four years of the tax year end to preserve your ability to carry them forward.

HMRC is increasingly receiving data from cryptocurrency exchanges operating in the UK and from international data-sharing agreements. The introduction of the OECD's Crypto-Asset Reporting Framework (CARF) will further increase HMRC's visibility into offshore crypto holdings from 2026 onwards. Voluntary compliance before HMRC raises enquiries results in substantially lower penalties.

Common UK Crypto Tax Errors

Ignoring crypto-to-crypto exchanges. Trading Bitcoin for Ethereum is a disposal of Bitcoin at its sterling value on the date of the trade. This triggers CGT regardless of whether you converted back to pounds.

Failing to apply pooling correctly. Calculating cost basis on a per-lot (FIFO) basis rather than the mandatory pool average results in incorrect figures and potential HMRC penalties.

Missing Self Assessment deadlines. HMRC charges automatic £100 penalties for late returns, with escalating penalties for returns more than three, six, and twelve months late. If you have never filed Self Assessment, you must notify HMRC of your chargeability by 5 October following the end of the relevant tax year.

When to Seek Professional Advice

This calculator provides estimates based on simplified assumptions. Consult a chartered accountant (ICAEW or ACCA) or tax adviser regulated by the Chartered Institute of Taxation (CIOT) if you have high transaction volume, participate in DeFi protocols, have received staking or mining income, hold crypto on foreign exchanges, are uncertain whether your activity constitutes trading (income tax) rather than investing (CGT), or have not filed previous years' crypto gains and need to use HMRC's voluntary disclosure facilities.