- Owning and using crypto is legal. Today crypto businesses must be registered with the Financial Conduct Authority (FCA) under the money laundering rules. A full authorization regime starts on 25 October 2027.
- HMRC taxes individuals mainly through Capital Gains Tax. For 2026/27 the rates are 18% and 24%, and the annual exempt amount is £3,000.
- Selling, swapping, spending or giving away crypto counts as a disposal. Your tokens are pooled per token type, with special same-day and 30-day matching rules.
- Companies pay corporation tax: 19% on small profits and 25% on profits over £250,000, with marginal relief in between.
- Since 1 January 2026, crypto service providers collect data on their users for HMRC under the OECD reporting framework (CARF).
This page covers private individuals and companies that hold, trade or accept crypto in the United Kingdom. It is general information, not legal or tax advice.
Legal status
HMRC’s Cryptoassets Manual says that owning and using cryptoassets is not illegal in the UK. It also says that HMRC does not consider cryptoassets to be currency or money.
The current regime
Crypto businesses are not authorized as financial firms today. Instead, exchange providers (crypto to money, crypto to crypto, and crypto ATM operators) and custodian wallet providers must register with the FCA under the Money Laundering Regulations. The FCA says that registration is a legal requirement to carry on this business, and that it is not a recommendation or endorsement. The FCA also warns consumers that using an unregulated crypto service means they have no access to the Financial Ombudsman Service or the Financial Services Compensation Scheme.
Crypto advertising is covered by the financial promotions rules. The FCA tells consumers that they shouldn’t be offered free gifts to join, or refer-a-friend bonuses.
The new regime from October 2027
The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026 No. 102) bring crypto activities into full FCA authorization. Regulation 1 sets two start dates. Twenty-one days after the regulations were made, the FCA could start preparing: making rules and taking applications. The remaining provisions take effect on 25 October 2027.
The FCA’s application gateway opened on 30 September 2026 and closes on 28 February 2027. Firms that do not apply must wind down their UK cryptoasset business before the new regime starts. If they do not, the FCA says they risk carrying on unauthorized business and breaching the general prohibition. The FCA states that the regime moves crypto businesses from the money laundering registration to full authorization under the Financial Services and Markets Act.
Tax for individuals
According to the Cryptoassets Manual, the tax treatment of a token depends on its nature and use, not on how the token is defined. For most individuals who invest, the relevant tax is Capital Gains Tax. Income Tax applies to some receipts, such as staking rewards.
Capital Gains Tax rates and allowance
| 2026/27 (from 6 April 2026) | Rate or amount |
|---|---|
| Gains within the basic Income Tax band | 18% |
| Gains above the basic band, and for higher rate taxpayers | 24% |
| Annual exempt amount (individuals) | £3,000 |
The gov.uk pages show the same 18% and 24% rates and the same £3,000 allowance for 2025/26.
What counts as a disposal
HMRC lists four ways you can trigger Capital Gains Tax: selling tokens, exchanging them for a different type of cryptoasset, using them to pay for goods or services, and giving them to another person. Gifts to your spouse or civil partner, or to a charity, are exempt.
Pooling and matching rules
- Pooling. Tokens of the same type go into one pool, with one average cost. NFTs are separately identifiable and are not pooled.
- Same-day rule. All tokens you acquire on the day you dispose of the same type are treated as acquired in a single transaction.
- 30-day rule. Tokens you buy within 30 days after a disposal are matched to that earlier disposal, earliest first.
A worked example
Our own simple example: a higher rate taxpayer sells crypto in 2026/27 for a total gain of £10,000, with no other gains and no losses. The taxable gain is £10,000 minus the £3,000 allowance, which is £7,000. At 24% the Capital Gains Tax is £1,680. This ignores pooling details and other gains or losses, so it is an illustration only.
Staking, airdrops and DeFi
- Staking (when not a trade): the pound sterling value of the tokens at the time you receive them is taxable as miscellaneous income. If you keep the tokens, a later disposal is subject to Capital Gains Tax.
- Airdrops: Income Tax will not always apply to airdropped tokens received in a personal capacity. If the tokens are given in return for, or in expectation of, a service, they are taxed as miscellaneous income or trade receipts.
- DeFi lending and staking: if there is no trade, making a loan or a stake may give rise to a disposal for Capital Gains Tax, and the return may be subject to Income Tax rather than Capital Gains Tax.
Losses
You can use capital losses on other assets to reduce your gain, but HMRC says you need to report the loss to it first. Mining is not covered by the manual pages we read for this guide, so we do not describe it here.
Tax for companies
| Corporation tax (financial years 2025 and 2026) | Rate |
|---|---|
| Profits up to £50,000 (small profits rate) | 19% |
| Profits over £250,000 (main rate) | 25% |
| Profits between £50,000 and £250,000 | 25% less marginal relief |
HMRC sets out how companies treat crypto in the Cryptoassets Manual (the CRYPTO41000 series). It covers loan relationships, intangible assets, chargeable gains, pooling, losses, negligible value claims and lost keys.
VAT. HMRC says VAT is due in the normal way on goods or services sold in exchange for exchange tokens. Exchanging tokens or money for tokens is an exempt financial transaction, and mining receipts are generally outside the scope of VAT. HMRC calls this treatment provisional.
Reporting and filing obligations
Individuals. You report gains and losses in your Self Assessment tax return, in the cryptoasset section, which has been available since the 2024/25 return. The online return for 2025/26 is due by 11:59pm on 31 January 2027, and the tax is due on the same day. Exchange reports are not tax calculations, and they do not track your pooled costs, so keep your own records.
Providers (CARF). The UK has implemented the OECD Cryptoasset Reporting Framework through the Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 (SI 2025/744), in force from 1 January 2026. Providers report every year by 31 May, and the first international exchange of the data takes place in 2027. In practice, HMRC will see more of your crypto activity, including activity at foreign providers.
Exchanges and KYC
Before you use an exchange or custodian, check that it is on the FCA register of cryptoasset businesses. Registered firms must verify your identity under the Money Laundering Regulations.
Regulation 64C of the Money Laundering Regulations (the travel rule) applies since 1 September 2023. When a crypto business sends crypto to another business, the transfer must carry the names of the sender and the recipient, and their account numbers or unique transaction identifiers. Extra details, such as customer ID numbers, addresses or identification document numbers, are required when both parties are UK-based, or when the transfer is worth £800 or more and not all parties are UK-based. Regulation 64C is amended from time to time, so check the current text on legislation.gov.uk.
Self-custody
We found no UK rule that restricts private wallets. Regulation 64C does not mention self-hosted or unhosted addresses. Tokens in your own wallet are taxed under the same rules as tokens on an exchange.
Lost private keys
According to the Cryptoassets Manual, misplacing a private key does not count as a disposal for Capital Gains Tax. If it can be shown that there is no prospect of recovering the key or accessing the tokens, you can make a negligible value claim. You are then treated as having disposed of and immediately reacquired the tokens, which crystallizes a loss. Companies get the same treatment in the corporate part of the manual.
Sources
- HMRC: Cryptoassets Manual, CRYPTO10100 (last checked October 2026)
- HMRC: Cryptoassets Manual, CRYPTO21200 (staking) (last checked October 2026)
- HMRC: Cryptoassets Manual, CRYPTO21250 (airdrops) (last checked October 2026)
- HMRC: Cryptoassets Manual, CRYPTO22200 (pooling and matching) (last checked October 2026)
- HMRC: Cryptoassets Manual, CRYPTO22400 (lost private keys) (last checked October 2026)
- HMRC: Cryptoassets Manual, CRYPTO61211 (DeFi lending and staking) (last checked October 2026)
- HMRC: Cryptoassets Manual, CRYPTO41000 (companies) (last checked October 2026)
- HMRC: Cryptoassets Manual, CRYPTO45000 (VAT) (last checked October 2026)
- GOV.UK: Capital Gains Tax rates (last checked October 2026)
- GOV.UK: Check if you need to pay tax when you sell cryptoassets (last checked October 2026)
- GOV.UK: Rates and allowances, corporation tax (last checked October 2026)
- GOV.UK: Self Assessment tax return deadlines (last checked October 2026)
- GOV.UK: Implementation of the Cryptoasset Reporting Framework (CARF) (last checked October 2026)
- legislation.gov.uk: The Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 (last checked October 2026)
- legislation.gov.uk: The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, regulation 1 (last checked October 2026)
- legislation.gov.uk: The Money Laundering Regulations 2017, regulation 64C (last checked October 2026)
- FCA: Cryptoassets, AML/CTF regime (last checked October 2026)
- FCA: Cryptoassets (consumer information) (last checked October 2026)
- FCA: How the cryptoasset application gateway will operate (last checked October 2026)
This page is general information, not legal or tax advice. Rules and rates change, so check the official sources above before you act.