UK Crypto Capital Gains: Allowances & Tax Rates Explained

Two numbers shape most UK crypto tax bills: the annual CGT exempt amount (the tax-free allowance) and the rate you pay on anything above it. This is a plain-English explainer of how those work in general — not personal tax advice, and not a list of guaranteed current figures, because both have changed repeatedly.

Read this first

Two different tax systems can apply

Before you can think about an allowance or a rate, you need to know which tax you're dealing with. In the UK, crypto activity broadly splits into two systems, and they're taxed differently.

• Capital Gains Tax (CGT) applies when you *dispose* of crypto you hold — selling for pounds, swapping one coin for another, spending it, or gifting it to anyone other than your spouse or civil partner. The full picture is in our crypto taxes in the UK overview.
• Income Tax applies when you *earn* crypto — being paid in it, mining, many staking rewards, and some airdrops. That's taxed at income rates, not CGT rates.

This matters because the allowance and rates discussed here are mostly about the CGT side. Earned crypto is folded into your income and taxed under the income system, which has its own bands and a separate personal allowance. We cover the earning side in more detail in crypto staking and mining tax in the UK.

The annual CGT exempt amount (the allowance)

Every UK taxpayer has an annual CGT exempt amount — sometimes called the annual exemption or, loosely, the CGT allowance. It's the total amount of net capital gains you can make across a tax year before any Capital Gains Tax is due. It covers all your chargeable assets together, not just crypto: shares, a second property, and crypto gains all draw on the same single allowance.

Two things are worth understanding clearly. First, the allowance applies to your gain, not the amount you sold. If you sell crypto worth several thousand pounds but your actual profit after cost basis is small, it's the profit that's measured against the allowance. Second — and this is the big one — the allowance has been reduced significantly in recent years.

Because the allowance is now much smaller than it once was, far more ordinary crypto users find themselves with a reportable gain than in the past. A modest portfolio that would have stayed comfortably under the old allowance can now tip over it. That's a key reason to keep good records and check where you stand each year.

What rate you pay depends on your income

CGT is not a single flat rate. Generally, the rate you pay on gains above the allowance depends on your income tax band for the year. In broad terms, the system works like this: your taxable gains are effectively stacked on top of your income, and the part that falls within the basic-rate band is taxed at the lower CGT rate, while anything pushing you into the higher-rate territory is taxed at the higher CGT rate.

The specific percentages have changed over time and can differ by asset type, so we won't pin a live number to them here. The principle that's stable is the one to remember: your other income affects your crypto CGT rate. A higher-rate taxpayer generally pays a higher CGT rate on the same gain than a basic-rate taxpayer would.

What's taxed how: CGT vs Income

The table below is a general guide to which system usually applies to common activities, and which allowance it draws on. It is a simplification — treatment can be fact-specific, especially for DeFi and NFTs, which we cover in DeFi and NFT tax in the UK. Always check the current rules.

Notice that the same coin can touch both systems over its life: taxed as income when earned, then for CGT when disposed of. That's not double taxation — the CGT gain is only measured from the value you were already taxed on as income.

Working out where you stand

You don't need to guess. A rough, general process for checking whether you have CGT to think about looks like this — but the figures and final calculation must be confirmed against current HMRC guidance.

1. Total up your net capital gains for the tax year, after applying HMRC's pooling rules for cost basis — see how to calculate crypto capital gains in the UK.
2. Subtract any allowable capital losses you're claiming for the year.
3. Compare what's left against the *current* annual CGT exempt amount from GOV.UK.
4. If you're over the allowance, work out which CGT rate applies based on your income band for that year.
5. Check the reporting and payment requirements and the deadlines and penalties so you don't miss a filing date.

If you have more than a handful of transactions, doing this by hand across multiple exchanges and wallets becomes error-prone fast. Reputable crypto tax software applies the pooling and matching rules for you, which is where a tool like the one below earns its keep.

Frequently asked questions