Staking rewards are taxable in the UK — but they are taxed as income, not capital gains, which surprises many people. The tax lands when the rewards arrive in your wallet, not when you eventually sell them.
HMRC's position on staking rewards
HMRC treats staking rewards as miscellaneous income in most circumstances. The GBP value of the tokens on the date you receive them is added to your taxable income for the year and taxed at your income tax rate — 20%, 40%, or 45% depending on your total income.
Worked example
You receive 0.5 ETH as staking rewards throughout 2024/25. The tokens arrive in batches, each time ETH has a different price. Total GBP value at receipt across all rewards: £900. You have £900 of taxable income. When you later sell those 0.5 ETH for £1,400, your capital gain is £500 (£1,400 − £900 cost basis set at the time of each receipt).
Note the double taxation element: you pay income tax when rewards arrive, then CGT on any appreciation when you sell. The income tax payment sets your cost basis for CGT purposes, so you are not taxed on the same amount twice — but both taxes do apply.
CEX staking vs. DeFi staking
Centralised exchange staking (Coinbase, Kraken, Binance Earn): straightforward. Rewards credited to your account are income at the GBP value on the date credited. Keep a record of each reward and its value.
Liquid staking (e.g. staking ETH for stETH on Lido): more complex. Depositing ETH and receiving stETH in return may constitute a disposal of ETH — HMRC may treat the exchange of one asset for another as a taxable event. Professional advice is recommended.
DeFi staking via protocols like Lido, Rocket Pool, or similar where you exchange your tokens for a liquid staking derivative is genuinely uncertain. HMRC's guidance on DeFi disposals is still evolving. If you have significant positions, get professional advice before year end — not after.
How to report staking income
Staking income goes on your Self Assessment return under “Other income” on the SA100 form — not on the SA108 capital gains supplement. The two are reported separately. If you have both staking income and crypto capital gains in the same year, both forms apply.
To report accurately, you need the GBP value of each staking reward at the date you received it. This is where most people struggle — exchange records often show token quantities but not the GBP rate at the time. Polyconomic fetches historical prices automatically. See your staking income →
Frequently asked questions
Is staking income taxed as income or capital gains?
Income. HMRC treats most staking rewards as miscellaneous income, taxed at your income tax rate (20%, 40%, or 45%) in the year received. Capital gains tax only applies later, when you sell the staked tokens, on any gain above the price at which you received them.
What if my total staking income is very small — is there a threshold?
There is a £1,000 trading and miscellaneous income allowance. If your total miscellaneous income (including staking) is below £1,000 in the year, it may be covered. Above that, it is taxable. Note that this £1,000 is shared across all miscellaneous income sources.
Do I need to report every individual staking reward?
In principle yes — each reward is a separate income event with its own GBP value at the date of receipt. In practice, you need the total GBP value of all rewards received in the tax year, broken down by date, to report accurately on your Self Assessment.
Is validator staking treated the same as exchange staking?
Running your own Ethereum validator node is treated as staking income in most cases, but HMRC's guidance notes that if the activity rises to the level of a trade, it could be taxed as trading income instead. Most individual validators are treated as receiving miscellaneous income.
What is my cost basis for staked tokens when I eventually sell them?
Your cost basis is the GBP value of the tokens at the time you received them as staking rewards — the same amount you paid income tax on. If you received 1 ETH worth £2,000 as a reward and later sell it for £3,000, your capital gain is £1,000 (not £3,000).
Does restaking (compounding rewards) change the tax treatment?
No. Each time you receive staking rewards and they are credited to you — whether you withdraw them or they are automatically restaked — that receipt is a taxable income event at the GBP value at that time.
General information only. HMRC guidance on DeFi staking is evolving. Consult a qualified adviser.