Most UK crypto investors know that selling for pounds might trigger tax. What surprises people is how broad HMRC's definition of a “disposal” is — and how many events they have been missing. Here are ten that could mean you owe tax, with enough detail to actually understand each one.
Capital gains events
These trigger Capital Gains Tax. Each disposal is matched against a cost basis using HMRC's three rules (same-day, 30-day, Section 104 pool). The gain or loss is the difference between proceeds and cost basis.
Selling crypto for GBP
Capital gainThe most familiar case. Your proceeds are the GBP amount received. Your cost is the Section 104 pool average (subject to same-day and 30-day matching). The gain or loss feeds into your SA108 total for the year.
Swapping one crypto for another
Capital gainEvery crypto-to-crypto trade is a disposal of the first asset at market value at the time of the swap. If you swapped BTC for ETH when BTC was worth £45,000, your BTC proceeds are £45,000 regardless of what you received. The ETH acquisition cost is also set at £45,000. This applies on DEXs as well as centralised exchanges.
Spending crypto on goods or services
Capital gainUsing Bitcoin or any cryptocurrency to pay for something — a product, a service, a subscription — is a disposal at market value on the date of purchase. The amount spent is your proceeds. This applies whether you pay directly in crypto or via a crypto debit card.
Gifting crypto to anyone other than your spouse
Capital gainGifts to friends, children, parents, or any person other than a spouse or civil partner are treated as a disposal at current market value. The recipient's acquisition cost is set at that same market value. Gifts to spouses are no-gain, no-loss — the spouse takes on your original cost basis.
DeFi liquidity pool deposits (in many cases)
Capital gainWhen you deposit ETH and USDC into a liquidity pool and receive LP tokens in return, HMRC may treat the exchange as a disposal of the underlying assets. When you exit and receive back the original assets (plus fees), that may be treated as a disposal of the LP tokens. The position depends on whether rights and risks of ownership transferred — HMRC's 2022 guidance confirms this is fact-specific.
Income events
These are taxed as income, not capital gains. They go on SA100 (not SA108) and are taxed at your income tax rate. The GBP value at the date of receipt is what is taxed. When you later sell or swap those tokens, the cost basis for CGT purposes is that same income value.
Staking rewards
IncomeWhether you stake on Coinbase, via a liquid staking protocol like Lido, or directly on-chain, rewards are treated as miscellaneous income at the GBP value on the day received. The staking reward becomes your cost basis for CGT when you later sell.
Mining rewards
IncomeCrypto received as a reward for mining is taxable income. If mining is done as a commercial business, the income is trading income. If done as a hobby, it is miscellaneous income. The distinction matters for allowable business expenses.
Airdrops (most)
Income or nil costAirdrops received in exchange for any action (promoting a project, holding a qualifying token, completing a task) are taxable income at receipt. Airdrops received without any action on your part may have nil acquisition cost for CGT purposes rather than income — but this distinction requires careful assessment of each airdrop.
Hard fork tokens
Nil cost acquisition (usually)Tokens received via a hard fork (e.g. Bitcoin Cash from Bitcoin holders in 2017) are treated as a nil-cost acquisition rather than income, provided you did not take any action to receive them. When you later sell them, the entire proceeds are a gain. Hard forks where you had to do something to claim the tokens may be treated differently.
Lost or stolen crypto (potential capital loss)
Capital loss claimIf crypto is permanently lost — to a scam, an exchange insolvency, a lost private key — you may be able to claim a capital loss via a negligible value claim. This requires evidence that the asset is permanently irrecoverable and is not straightforward. HMRC requires a specific claim and evidence. Professional advice is strongly recommended for significant losses.
Frequently asked questions
Does transferring crypto between my own wallets trigger tax?
No. Moving crypto between wallets you own — from Coinbase to a hardware wallet, for example — is not a disposal and does not trigger tax. However, you must be able to demonstrate that both wallets belong to you. Keep a record of your own wallet addresses.
If I stake ETH via Lido and receive stETH, is that a taxable disposal of my ETH?
HMRC's DeFi guidance suggests that if the rights and risks of ownership of the original ETH transfer to the Lido protocol in exchange for stETH, this may constitute a disposal. The position is not settled. Many tax advisers treat the stETH-for-ETH exchange as a disposal, with the stETH acquired at the market value of ETH at the time of deposit.
I received an airdrop from a project I had never interacted with. Is that income?
If you genuinely did not take any action to receive the airdrop — no sign-up, no qualifying holding, no task — HMRC may treat the acquisition as nil-cost rather than income. You would then have a capital gain when you sell equal to the full proceeds. Document why you believe you took no action to receive it.
What counts as "spending" crypto for tax purposes?
Any transaction where you use crypto to acquire goods or services is a spending disposal. This includes crypto debit card transactions (where the card converts crypto to fiat and pays the merchant), direct crypto payments to merchants, and paying for digital services (NFTs, in-game items, subscriptions) with crypto.
Are referral bonuses from exchanges taxable?
Yes, in most cases. Referral bonuses paid in crypto are treated as miscellaneous income at the GBP value on the date received. Some exchanges describe them as promotional payments rather than income, but HMRC's position is that they are taxable.
If an exchange I used has gone bankrupt, can I claim the loss?
Potentially. If assets are permanently irrecoverable following an exchange collapse, you may be able to make a negligible value claim. You need to evidence that the assets are genuinely irrecoverable — not just temporarily frozen. HMRC requires a specific claim and the timing matters. Seek professional advice.
Tool information accurate at time of writing.