Which Taxes Apply?
Last updated
Last updated
Anyone who trades (buys/sells) or mines cryptoassets, or uses cryptoasset derivatives, needs to first consider if they are engaged in financial trading in cryptoassets (ie a business activity), rather than simply assuming they are classed as an investor and taxed under the capital gains tax regime/miscellaneous income regime.
HMRC state: "Only in exceptional circumstances would they expect individuals to buy and sell exchange tokens with such frequency, level of organisation and sophistication that the activities amount to a trade in itself."
Whether or not there is financial trading in cryptoassets is a complex area. We recommend you read our detailed guidance and consult a professional tax advisor to consider your specific circumstances.
Assuming the cryptoasset activity is not treated as a financial trade, here is an overview of the most common tax treatment for different types of crypto activity. Click the activity type for more detailed information.
| Disposal/Activity Type | Capital Gains Tax | Income Tax |
|---|---|---|
* No Capital Gains Tax at the time of acquisition, but it is subject to capital gains tax when the cryptoasset is later disposed.
^ may affect Capital Gains Tax base cost, though.
✅
❌
✅
❌
✅
❌
✅
❌
❌ (if conditions met)
❌
❌ (if conditions met)
❌
🎈 Airdrops
❌*
✅ (Sometimes)
🤝 Staking
✅ (if beneficial ownership is transferred)
✅
❌
❌
❌^
❌
❌*
✅
❌*
✅
Potential to claim capital losses
❌
✅
❌
❌*
✅
✅ (if beneficial ownership is transferred)
❌
❌^
❌
✅ (Individual discretion)
✅ (Individual discretion)
✅ (if beneficial ownership is transferred)
❌
✅ (if beneficial ownership is transferred)
❌
(if beneficial ownership is transferred)
❌
❌*
✅
❌*
❌
❌*
✅
❌*
❌
✅
❌
❌*
✅
Gifts
Forks
Mining
Employment income
Liquidity Pool Rewards
NFTs (Non Fungible Tokens)