Crypto Tax UK: HMRC §104 Pool Guide
How HMRC taxes crypto in the UK: the Section 104 pool, same-day and 30-day bed-and-breakfasting rules, the CGT annual exempt amount, income tax on staking and mining, and SA108 filing. Coinfig UK support is coming soon.
Last reviewed: · Reviewed by Johan Pretorius, Registered Tax Practitioner
Overview
In the United Kingdom, HM Revenue & Customs (HMRC) treats crypto assets (which it calls "cryptoassets") as property, not currency. For most individuals, gains on disposal fall under Capital Gains Tax (CGT), while certain receipts (mining, staking, airdrops in some cases, employment income in crypto) are subject to Income Tax. HMRC's Cryptoassets Manual sets out the detail.
Coinfig automation for the UK is coming soon — join the waitlist for launch updates. This guide is general information, not tax advice; rules and allowances change each tax year, so confirm the current position with HMRC or an adviser.
Capital Gains Tax and the §104 pool
The defining UK feature is share-pooling, applied to crypto. For each token, HMRC requires you to maintain a Section 104 pool: a running aggregate of the quantity held and the pooled allowable cost. When you acquire more of the same token, both the quantity and the pooled cost increase; when you dispose, you deduct an average cost proportionate to the units sold. This is materially different from South Africa's FIFO/specific-ID approach.
Same-day and 30-day (bed-and-breakfasting) rules
Two matching rules override the pool and must be applied before the §104 pool:
- Same-day rule: disposals are first matched with acquisitions of the same token made on the same day.
- 30-day rule (the "bed-and-breakfasting" rule): next, disposals are matched with acquisitions in the following 30 days. This stops investors from selling to crystallise a loss and immediately rebuying at the same cost.
Only after applying the same-day and 30-day rules do you draw the remaining matched units from the §104 pool.
Allowance and rates
Each tax year individuals have a CGT annual exempt amount (which has been reduced in recent years — confirm the current figure). Gains above the allowance are taxed at the CGT rates applicable to the year and your income band. Losses can be offset and carried forward if claimed.
Income Tax on crypto
Crypto received as employment income, from mining or staking carried out as taxable activity, or as certain airdrops (especially where received in return for something), is subject to Income Tax (and possibly National Insurance), valued in pounds at receipt. That value becomes the acquisition cost for a later CGT disposal.
Filing: Self Assessment and SA108
Report capital gains on the SA108 Capital Gains Summary supplementary pages of the Self Assessment return (and the crypto-specific entries HMRC requires). Income from crypto goes in the relevant income sections. Keep records of every acquisition and disposal, the pooled cost, and the pound values used.
Last reviewed
UK allowances and rates change each tax year. Confirm the current annual exempt amount and CGT rates with HMRC before filing. This is general information, not tax advice.
Tax treatment at a glance
| Transaction | Event | Treatment |
|---|---|---|
| Selling crypto for pounds | Disposal (CGT) | Capital gain = proceeds less allowable cost, matched by same-day, then 30-day, then Section 104 pool rules. Annual exempt amount applies; gains above it taxed at CGT rates. |
| Buying more of the same token | Acquisition (pooling) | Increases the Section 104 pool quantity and pooled allowable cost; future disposals deduct an average cost. |
| Crypto-to-crypto trade | Disposal (CGT) | Disposal of the token given up at pound market value; a CGT event subject to the matching rules. |
| Selling and rebuying within 30 days | Disposal (30-day rule) | The disposal is matched with the reacquisition under the bed-and-breakfasting rule, not the pool — limiting artificial loss crystallisation. |
| Staking or mining rewards | Income received | Income tax (and possibly NICs) at market value on receipt; that value becomes the acquisition cost for a later CGT disposal. |
| Airdrops | Income or capital (fact-dependent) | Often income where received in return for something; otherwise may have nil income with CGT on disposal. Depends on the facts. |
| Transferring between own wallets | No disposal | Not a disposal; pooled cost continues. Fees may have their own treatment. |
Forms and filing
Report capital gains on the SA108 Capital Gains Summary supplementary pages of the Self Assessment return, alongside any crypto-specific entries HMRC requires; report crypto income in the relevant income sections. Maintain records of every acquisition and disposal, the Section 104 pooled cost, and the pound values used. UK allowances and CGT rates change each tax year — confirm the current annual exempt amount and rates with HMRC before filing.
Penalties
HMRC can charge penalties and interest for failure to notify, late filing, or inaccuracies, scaled by behaviour (from careless to deliberate and concealed). HMRC receives data from exchanges and runs crypto compliance campaigns, so undeclared gains are increasingly visible. This is general information, not tax advice.