How do I calculate a cryptocurrency gain or loss?
Answered 17 March 2026
Calculating a Cryptocurrency (Cryptoasset) Gain or Loss
What the law says
Cryptoassets are chargeable assets for Capital Gains Tax (CGT) purposes, being capable of being owned and having a realisable value. The standard CGT rules under TCGA 1992 apply, including the share identification/pooling rules.
The identification order for disposals is:
- Same-day rule (TCGA 1992/S105): Tokens acquired and disposed of on the same day are matched against each other first
- 30-day rule (TCGA 1992/S106A): Tokens acquired within the 30 days following a disposal are matched next (on an earliest-disposal-first basis)
- Section 104 pool: Any remaining tokens are matched against the section 104 pool
HMRC Guidance / Practice
Step 1 – Identify what is taxable
In the vast majority of cases, individuals hold cryptoassets as a personal investment and will be liable to pay Capital Gains Tax when they dispose of them. Income Tax may apply instead where tokens are received as employment income, from mining, transaction confirmation, or airdrops.
Step 2 – Basic gain/loss computation
For each disposal, the gain or loss is:
Disposal proceeds (or market value) Less allowable costs = Gain or Loss
The allowable costs deducted depend on which identification rule applies (same-day, 30-day, or section 104 pool — see above).
Step 3 – The Section 104 Pool
Each type of token has its own section 104 pool. The pool tracks:
- The total quantity of tokens held
- The total pooled allowable costs of acquiring them
When tokens are disposed of from the pool, the allowable cost is calculated proportionally:
Pooled allowable cost × (tokens disposed of ÷ total tokens in pool)
The pool is reduced accordingly after each disposal.
Worked Example (30-day rule + section 104 pool)
Melanie holds 14,000 token E with a pooled allowable cost of £200,000. She sells 4,000 tokens for £160,000 on 30 August, then buys 500 tokens for £17,500 on 11 September (within 30 days):
| Consideration | £160,000 |
| Less: 30-day costs (500 tokens @ £17,500) | (£17,500) |
| Less: S104 pool costs (3,500 tokens: £200,000 × 3,500/14,000) | (£50,000) |
| Gain | £92,500 |
Key Points to Note
- No indexation allowance applies for individuals (only for companies, and only for pre-April 2018 expenditure)
- Hard forks: Where a hard fork creates new tokens, TCGA 1992/S43 applies — the allowable costs of the original pool are split between the original and new tokens on a just and reasonable basis under s.52(4) TCGA 1992
- One-way transfers (e.g. bridging to another blockchain): TCGA 1992/S43 applies and the full allowable costs carry over to the new asset
- Record keeping: You must retain records of disposal proceeds, acquisition costs, and the gain/loss calculation
Citation sources
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