Section 104 pool
Also known as: s104 pool, pooling
HMRC's rule for the UK: identical tokens are grouped into a single pool with an averaged allowable cost used on disposal.
Definition
The Section 104 pool is a UK (HMRC) concept where identical tokens of the same type are pooled together, with a single averaged allowable cost. On disposal, the pooled average cost is used to compute the gain, subject to the same-day and 30-day "bed and breakfasting" rules. South Africa does not use Section 104 pooling; it relies on base cost with FIFO for identical assets.
Example
A UK investor holds 5 ETH across several buys. HMRC pools them, so a sale of 1 ETH uses the average pooled cost rather than a specific lot.
Jurisdiction notes
- United Kingdom: HMRC applies Section 104 pooling to identical tokens, with same-day and 30-day matching rules taking priority.
- South Africa: South Africa does not use Section 104 pooling; FIFO and base cost apply to identical crypto assets.