How does the Section 104 pool work for crypto?

The Section 104 pool is HMRC's method for calculating crypto cost basis. All purchases of the same token are pooled together — total cost divided by total quantity gives the average cost per token. When you sell, the allowable cost is tokens sold multiplied by this average. Same-day and 30-day matching rules take priority over the pool.

Is staking income taxable in the UK?

Yes. Staking rewards are treated as miscellaneous income and taxed at your marginal income tax rate (20%, 40%, or 45%) when received. When you later sell those staked tokens, Capital Gains Tax applies on any increase in value from when you received them.

Do I need to report crypto on my UK tax return?

Yes, if your total gains exceed the £3,000 annual exempt amount, or total disposal proceeds exceed £12,000. Report via Self Assessment. Even losses are worth reporting to carry forward against future gains. HMRC has data-sharing agreements with major crypto exchanges.

Crypto Tax Calculator

Calculate UK crypto tax for 2025/26. See Capital Gains Tax on Bitcoin, Ethereum and other crypto disposals, understand Section 104 pooling rules, and calculate income tax on staking, mining, and airdrops.

Calculate Capital Gains Tax on selling, swapping, or spending crypto

Purchase price (cost basis)

What you originally paid for the crypto

Sale proceeds

What you received when you sold or disposed

Annual income (salary)

Determines your CGT rate band

Other capital gains this year

Gains from shares, property, other crypto etc.

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How to Use This Calculator

Crypto CGT tab

Enter your purchase price (cost basis) and sale proceeds from a crypto disposal. Add your annual income so the calculator can determine whether you pay the 18% basic rate or 24% higher rate of Capital Gains Tax. Disposals include selling crypto for GBP, swapping one crypto for another, spending crypto on goods or services, and gifting crypto (except to a spouse or civil partner). The calculator deducts the £3,000 annual exempt amount and shows your CGT liability.

Multiple Transactions tab

Enter two separate purchases (quantity and total cost) and a sale (quantity and proceeds). The calculator builds a Section 104 pool, showing the weighted average cost per token across all purchases. When you sell, HMRC requires you to use this pooled cost basis to calculate your gain. The calculator shows the full pooling maths transparently so you can verify the figures on your Self Assessment.

Crypto Income tab

Enter the GBP value of staking rewards, mining income, and airdrops received during the tax year. Add your employment salary so the calculator can determine your marginal income tax rate. Crypto income is taxed as miscellaneous income at your marginal rate (20%, 40%, or 45%). Mining income above £1,000 may also attract Class 4 National Insurance.

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The Formula

UK crypto tax uses two main calculations — Capital Gains Tax on disposals and Income Tax on crypto received:

Capital Gains Tax:
Capital Gain = Sale Proceeds − Allowable Cost (S104 pooled cost basis)
Taxable Gain = Capital Gain − Annual Exempt Amount (£3,000)
CGT = Taxable Gain × Rate (18% basic or 24% higher)

Section 104 Pool:
Pooled Cost per Token = Total Cost of All Purchases ÷ Total Tokens Held
Allowable Cost on Disposal = Tokens Sold × Pooled Cost per Token

Crypto Income Tax:
Tax = Crypto Income × Marginal Rate (20% / 40% / 45%)
(Staking, mining, airdrops = miscellaneous income)

The same-day rule takes priority: if you buy and sell the same token on the same day, those transactions are matched first. Next, the 30-day rule (bed and breakfasting): disposals are matched to purchases within the following 30 days. Only after both rules are applied does the Section 104 pool come into play.

HMRC treats each type of cryptoasset separately. You maintain a separate S104 pool for Bitcoin, Ethereum, and each other token you hold.

Example

Alex — Marketing Manager, 34, London

Alex earns £45,000 and has made two Bitcoin purchases over the years. In 2025, Alex sells some Bitcoin at a profit.

Purchase history

Buy 1 (2021)1 BTC for £5,000

Buy 2 (2023)0.5 BTC for £8,000

Total pool1.5 BTC, cost £13,000

Pooled cost per BTC£8,667 (£13,000 ÷ 1.5)

Disposal (2025)

Sold0.8 BTC for £20,000

Allowable cost0.8 × £8,667 = £6,933

Capital gain£20,000 − £6,933 = £13,067

Annual exempt amount£3,000

Taxable gain£13,067 − £3,000 = £10,067

Taxable income (£45,000 − £12,570 PA)£32,430

Basic rate band remaining£37,700 − £32,430 = £5,270

CGT at 18% (on £5,270)£949

CGT at 24% (on £4,797)£1,151

Total CGT due£2,100

Alex pays £2,100 in CGT on the crypto disposal. The remaining 0.7 BTC stays in the S104 pool with a cost basis of £6,067 (0.7 × £8,667).

FAQ

Is crypto taxed in the UK? ▼

Yes. HMRC treats cryptoassets as property, not currency. Selling, swapping, spending, or gifting crypto triggers Capital Gains Tax on any profit above the £3,000 annual exempt amount. Crypto received as income (staking, mining, airdrops, payment for services) is taxed as miscellaneous income at your marginal income tax rate. You must report crypto gains and income via Self Assessment.

How does the Section 104 pool work? ▼

The Section 104 pool is HMRC's method for calculating the cost basis of fungible assets like crypto tokens. All purchases of the same token are pooled together — the total cost divided by the total quantity gives you the average cost per token. When you sell, you multiply the tokens sold by this average cost to get your allowable deduction. Two rules take priority: the same-day rule (matching buys and sells on the same day) and the 30-day rule (matching sells to purchases within 30 days). Only remaining disposals use the S104 pool.

What about swapping one crypto for another? ▼

Swapping crypto-to-crypto (e.g., BTC to ETH) is a disposal for CGT purposes. You calculate the gain based on the GBP market value at the time of the swap. The same applies to using crypto in DeFi: wrapping tokens (e.g., ETH to WETH), entering liquidity pools, and certain yield farming activities may all be treated as disposals. Each disposal needs to be recorded and reported. Only transferring the same token between your own wallets is not a disposal.

Is staking income taxable? ▼

Yes. Staking rewards are treated as miscellaneous income and taxed at your marginal income tax rate (20%, 40%, or 45%) when received. The taxable amount is the GBP value of the tokens at the time you receive them. When you later sell or swap those staked tokens, Capital Gains Tax applies on any increase in value from the date you received them. Mining income is treated similarly, and may also attract Class 4 National Insurance if HMRC considers it a trading activity.

Do I need to report crypto on my tax return? ▼

Yes, if your total gains from all disposals exceed the £3,000 annual exempt amount, or if your total disposal proceeds exceed four times the allowance (£12,000), you must report via Self Assessment. Even if you made a loss, it is worth reporting to carry the loss forward against future gains. HMRC has data-sharing agreements with major crypto exchanges and can identify unreported crypto activity. Penalties for non-disclosure can be significant.

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