Do I need to pay capital gains tax on crypto profits?
Answered 17 March 2026
Yes — in most cases, yes, you will need to pay Capital Gains Tax (CGT) on profits from cryptocurrency. Here is a structured summary:
What the law says
CGT applies to UK residents on all chargeable assets, wherever situated. Under TCGA 1992 s.1A, a UK-resident person is chargeable to CGT on chargeable gains accruing in a tax year on the disposal of assets wherever situated.
Cryptoassets are chargeable assets. Tokens count as a 'chargeable asset' for CGT purposes if they are both (i) capable of being owned and (ii) have a value that can be realised.
An annual exempt amount reduces your taxable gains. Under TCGA 1992 s.1K, the annual exempt amount is currently £3,000 per tax year. This is deducted from your net chargeable gains (after losses) before CGT is charged.
HMRC guidance / practice
The default position is CGT, not Income Tax. In the vast majority of cases, individuals hold cryptoassets as a personal investment and will be liable to pay CGT when they dispose of their cryptoassets.
Buying and selling is normally treated as investment activity. HMRC expects that buying and selling of tokens by an individual will normally amount to investment activity (rather than a trade of dealing in tokens), meaning CGT applies to any gains realised.
Income Tax can apply in some circumstances. You may instead owe Income Tax and National Insurance contributions on cryptoassets received from your employer as non-cash pay, or from mining, transaction confirmation, or airdrops. There may also be rare cases where an individual is running a business carrying on a financial trade in cryptoassets — in such cases, Income Tax rules take priority over CGT rules.
You must calculate your gain or loss on each disposal. A person must calculate their gain or loss when they dispose of their exchange tokens to find out whether they need to pay CGT.
Key practical points
| Scenario | Tax treatment |
|---|---|
| Selling/exchanging crypto held as investment | CGT |
| Receiving crypto from employer | Income Tax + NIC |
| Mining / airdrops / transaction confirmation | Income Tax + NIC |
| Running a crypto trading business | Income Tax (trading profits) |
| Gains below £3,000 annual exempt amount | No CGT payable |
⚠️ Note: This is a general overview. Your specific position will depend on the facts of your situation. You should consider consulting a tax adviser for personalised advice.
Citation sources
If a company holds exchange tokens as an investment, they are liable to pay Corporation Tax on any gains they realise when they dispose of it. If a sole trader holds exchange tokens as an investment, they are liable to pay Capital Gains Tax on any gains they realise. If a partnership or a limited liability partnership holds exchange tokens as an investment, the partners (or members) are liable to pay Corporation Tax (if they are a company) or Capital Gains Tax (if they are an individual) on any
Part 1 Capital gains tax and corporation tax on chargeable gains Chapter 1 Capital gains tax Annual exempt amount Annual exempt amount 1K 1 If an individual is (or, apart from this section, would be) chargeable to capital gains tax for a tax year on chargeable gains, the annual exempt amount for the year is to be deducted from those gains (but no further than necessary to eliminate them). 2 The annual exempt amount for a tax year is £3,000 . 3 . . . . . . . . . . . . . . . . . . . . . . . . . .
Part 1 Capital gains tax and corporation tax on chargeable gains Chapter 1 Capital gains tax Territorial scope of charge Territorial scope 1A 1 A person who is UK resident for a tax year is chargeable to capital gains tax on chargeable gains accruing to the person in the tax year on the disposal of assets wherever situated. 2 In the case of individuals who are UK resident for a tax year, see also— za Schedule D1 (relief for new residents on foreign gains), a Schedule 1 (foreign gains accruing to
Tokens are digital and therefore intangible, but count as a ‘chargeable asset’ for Capital Gains Tax if they’re both: capable of being owned have a value that can be realised For more information about what makes an ‘asset’ for Capital Gains Tax purposes, see CG12010. Customers looking for guidance on paying Capital Gains Tax when disposing of cryptoassets can refer to this guidance: https://www.gov.uk/guidance/check-if-you-need-to-pay-tax-when-you-sell-cryptoassets. HMRC expects that buying and
In the vast majority of cases, individuals hold cryptoassets as a personal investment, usually for capital appreciation or to make particular purchases. They will be liable to pay Capital Gains Tax when they dispose of their cryptoassets. Individuals will be liable to pay Income Tax and National Insurance contributions on cryptoassets which they receive from: their employer as a form of non-cash payment (see CRYPTO21100) mining, transaction confirmation or airdrops (see CRYPTO21150, CRYPTO21200