How are NFTs taxed in the UK?
Answered 17 March 2026
How Are NFTs Taxed in the UK?
HMRC Guidance / Practice
1. Tax treatment depends on nature and use, not token type
HMRC's overarching principle is that "the tax treatment of all types of tokens is dependent on the nature and use of the token and not the definition of the token." HMRC does not consider cryptoassets (including NFTs) to be currency or money.
2. Capital Gains Tax (CGT) — the default position for individuals
For most individuals, NFTs will be held as investment assets. Where buying and selling does not amount to a trade, Capital Gains Tax applies on disposal. Each NFT is treated as a separate asset for CGT purposes, since NFTs are non-fungible — "if the asset is non-fungible (e.g. NFTs with differing values), each unit is treated as a separate type of relevant cryptoasset."
3. Income Tax — where trading activity is involved
Only in exceptional circumstances would HMRC consider buying and selling cryptoassets (including NFTs) to amount to a financial trade. However, if it does, "Income Tax will take priority over Capital Gains Tax and will apply to profits (or losses)" for individuals. Whether trading is occurring depends on factors such as frequency, level of organisation, and intention.
4. Corporation Tax for companies
Companies holding NFTs that are not engaged in a trading activity will typically be subject to Corporation Tax on chargeable gains arising from disposal.
5. NFTs received as airdrops or income
Where an NFT (or other token) is received in return for a service or as part of a trade, Income Tax may apply on receipt as miscellaneous income or trading receipts. Even where Income Tax does not apply on receipt, "the disposal of a token received through an airdrop may result in a chargeable gain for Capital Gains Tax."
6. Reporting obligations (CARF)
NFTs traded on marketplaces are generally treated as "relevant cryptoassets" for reporting purposes under the Cryptoasset Reporting Framework (CARF), as this indicates they can be used for payment or investment purposes. Low-value NFTs meeting specific criteria (e.g. never traded above USD 200, traded fewer than 10 times since creation, not marketed as an investment) may be treated as outside scope.
⚠️ Important caveat: The available sources do not contain HMRC's dedicated NFT-specific tax guidance (CRYPTO10100+ in the Cryptoasset Manual). For a complete picture — particularly on the creation/minting of NFTs and specific CGT computation rules — you should consult HMRC's Cryptoasset Manual directly (accessible at gov.uk) and HMRC's published guidance "Cryptoassets: tax for individuals".
Citation sources
As with the tax analysis of other types of business, the question of whether a trade is being carried on is a key factor in determining the correct tax treatment. Whether the buying and selling of exchange tokens amounts to a trade depends on a range of factors including: frequency level of organisation intention If a person’s activities do amount to a trade, the receipts and expenses will form part of the calculation of the individual or company’s trading profit. Only in exceptional circumstanc
Only in exceptional circumstances would HMRC expect individuals to buy and sell exchange tokens with such frequency, level of organisation and sophistication that the activity amounts to a financial trade in itself. If the taxpayer’s activity is considered to be trading then Income Tax will take priority over Capital Gains Tax and will apply to profits (or losses). As with any activity, the question whether cryptoasset activities amount to trading depends on a number of factors and the individua
The tax treatment of all types of tokens is dependent on the nature and use of the token and not the definition of the token. HMRC does not consider cryptoassets to be currency or money. This reflects the position previously set out in the Cryptoasset Taskforce report. On its own, owning and using cryptoassets is not illegal in the UK and does not imply tax evasion or any other illegal activities.
Under CARF, NFTs are considered relevant cryptoassets if they are traded on marketplaces, as this indicates they can be used for payment or investment purposes. Solely in the context of ascertaining if an NFT can be used for payment or investment purposes, an RCASP can treat an NFT as not being usable for payment or investment purposes if it can adequately determine that all of the following conditions are met: The NFT does not represent financial assets or fungible cryptoassets, It is not mark
t are fungible (i.e. mutually substitutable), they are treated as the same type for aggregation. If the asset is non-fungible (e.g. NFTs with differing values), each unit is treated as a separate type of relevant cryptoasset.
An airdrop is where someone receives an allocation of tokens, for example as part of a marketing or advertising campaign in which people are selected to receive them. Other examples of airdrops may involve tokens being provided automatically due to other tokens being held or where an individual has registered to become eligible to take part in the airdrop. The airdropped tokens, typically, have their own infrastructure (which may include a smart contract, blockchain or other form of distributed
Companies are subject to Corporation Tax on their profits and gains. Corporation Tax also applies to companies that are members of a partnership or a limited liability partnership in respect of their share of the partnership profits and gains. When calculating their Corporation Tax, companies must take into account all of the exchange token transactions they have carried out (as they would with any other type of asset). It is important to note that HMRC does not consider any of the current types