Are the tax rules for crypto swaps and sales confusing? Many beginners worry about whether a crypto-to-crypto trade counts as a taxable disposal, how to calculate gains when no GBP changed hands, and what records HMRC expects. This guide provides pragmatic, plain-English answers to the most common questions under the heading Crypto Tax FAQs for Beginners, showing how CGT applies, how to calculate gains and losses, how pooling works, and how to report on Self Assessment.
Key takeaways: what to know in one minute
- Crypto-to-crypto trades are disposals for Capital Gains Tax purposes: swapping one token for another typically triggers a taxable event.
- Calculate gain in GBP at the time of disposal: use the market value in sterling when the swap occurred to compute proceeds and allowable costs.
- HMRC pooling and the 30-day/same-day rules change which lots are matched: these rules can increase or reduce gains depending on timing.
- Keep detailed records: dates, amounts, GBP values, fees and transaction IDs are essential evidence for Self Assessment.
- Losses can be offset against gains and the annual exempt amount should be used strategically; unused losses carry forward.
How CGT applies to crypto-to-crypto trades
HMRC treats most disposals of cryptoassets as events that may give rise to Capital Gains Tax rather than Income Tax for casual investors. A disposal includes selling crypto for fiat, exchanging crypto for another crypto, using crypto to pay for goods or services, and gifting (except to a spouse in some cases). When one cryptoasset is exchanged for another, the disposal arises at the moment the exchange is completed, and a notional sterling value must be used to compute proceeds.
If activity is trading-like (frequent, organised, profit-seeking), HMRC may classify profits as trading income. For the typical investor asking the basic questions in these FAQs, focus first on CGT treatment and meet the record-keeping and reporting requirements under that regime. For borderline situations, consider professional advice.
Calculating capital gains for crypto-to-crypto swaps
Step-by-step calculation for a single swap:
- Identify the disposal date and time (GMT/BST as appropriate).
- Determine the proceeds in GBP: the market value in sterling of the crypto received at that moment.
- Determine the allowable cost: the original acquisition cost of the crypto disposed, adjusted for allowable fees.
- Compute gain = proceeds (GBP) − allowable cost (GBP).
- Apply pooling rules (same-day, 30-day, and section 104 pooling) to choose which acquisition lot matches the disposal.
Example practical calculation:
- Bought 1.2 ETH on 2024-07-05 for £900 (including fees).
- On 2025-03-12, exchanged 0.5 ETH for 100 ABC tokens. The market value of 100 ABC at that moment was £600.
- The matched allowable cost for 0.5 ETH (using section 104 pooling) = (0.5 / 1.2) × £900 = £375.
- Gain = £600 − £375 = £225.
All GBP values must be supported by an exchange rate or market price at the disposal time. Use a reliable data source and keep screenshots or CSVs. The HMRC guidance expects market value evidence when an exchange does not pass through GBP.
Recording disposals and allowable costs for HMRC
HMRC requires detailed records for each disposal. Minimum fields to store:
- Date and time of each disposal (UTC / local),
- Type and quantity of crypto disposed and received,
- Counterparty or exchange, transaction ID/hash,
- Market value in GBP of assets received or disposed at the time,
- Original acquisition date and cost (including fees),
- Any incidental costs (exchange fees, network fees, custody fees), and
- How the matching was applied (same-day, 30-day, or pooled).
Allowable costs include purchase price and incidental costs directly attributable to acquisition or disposal. Fees deducted from proceeds (exchange fees, gas fees if paid at disposal) reduce proceeds. Fees that formed part of acquisition costs increase the base cost. Keep records for at least 6 years.
How 30-day and same-day rules affect pooling
When a disposal occurs, HMRC requires matching of the disposal to acquisitions in the following priority:
- Same-day acquisitions (purchases on the same date) are matched first.
- Within-30-day acquisitions (the so-called 30-day rule often called "bed and breakfast" for shares) are matched next.
- Any remaining disposal quantity is matched to the taxpayer's section 104 holding (a pooled average cost across previous acquisitions).
This matching order can materially change gains. For example, buying the same asset shortly after selling to crystallise a loss may be matched under the 30-day rule, denying the intended tax effect.
Practical implications:
- Same-day acquisition matching can force higher-cost lots to be used first, reducing gains or increasing losses.
- 30-day rule prevents immediate repurchases from being used to create a tax advantage.
- Pooling smooths costs over many purchases, which helps when holdings are built gradually.
Reporting crypto-to-crypto gains on Self Assessment
When taxable gains arise, they must be reported on the Self Assessment tax return in the tax year the disposal occurred (6 April to 5 April cycle). Use the Capital Gains summary pages and complete:
- Total gains for the year,
- Allowable losses claimed,
- Details of disposals if requested by HMRC (keeping records rather than listing every transaction on the return is acceptable if totals and supporting records are retained).
If total taxable gains (after losses and exemptions) exceed the annual exempt amount for the year, the tax owed must be paid by the usual payment on account dates. If the total proceeds exceed certain thresholds or complex crypto activity exists, HMRC guidance or a tax adviser should be consulted.
Useful official links:
Offsetting crypto losses and using annual allowance
Losses from disposals can be used against gains in the same tax year to reduce tax liability. If losses exceed gains, the unused losses can be carried forward indefinitely and offset against future gains, provided the loss is reported to HMRC (either on the Self Assessment return or by writing to HMRC within the specified timeframe in some cases).
The annual exempt amount (the CGT allowance) applies to individuals each tax year; any taxable gains above that allowance incur CGT. Effective use of losses, timing of disposals, and consideration of the annual exempt amount can reduce tax liability. For example, crystallising small losses in a year with gains can reduce the incremental tax owed. Losses arising from theft or exchange insolvency have specific rules and may require evidence.
Comparative table: disposal types and tax treatment
| Disposal type |
Tax treatment |
Records needed |
| Crypto → fiat (sell for GBP) |
CGT on gain (unless trading income) |
Date, GBP proceeds, acquisition cost, fees, tx IDs |
| Crypto → crypto (swap) |
CGT using GBP market value of received asset |
Market value in GBP at disposal, fees, pool matching |
| Crypto used for goods/services |
CGT on disposal; VAT rules may also apply |
Invoice, GBP value at time, acquisition cost, fees |
| Airdrops/staking rewards |
May be Income Tax when received; later disposal could create CGT event |
Date received, market value in GBP, reason for receipt, costs |
Quick reporting flow
1️⃣
Gather recordsdates, GBP values, tx IDs, fees
2️⃣
Match disposalsapply same-day, 30-day, then pooling
3️⃣
Calculate gains/lossescompute GBP gain per disposal
4️⃣
Report and payinclude totals on Self Assessment
Reporting flow visual
How to report a crypto disposal in 4 steps
📥
Step 1 → Gather transaction dates, amounts and GBP values
🔁
Step 2 → Match disposals using same-day, 30-day then pool
🧮
Step 3 → Calculate gain in GBP for each disposal
📝
Step 4 → Report totals on Self Assessment and claim losses
Advantages, risks and common mistakes
Benefits / when to apply
- ✅ Clarity: treating swaps as disposals gives a clear rule to follow.
- ✅ Loss relief: losses are usable against gains in the same year or future years.
- ✅ Pooling simplifies ongoing record-keeping for many small buys.
Errors to avoid / risks
- ⚠️ Failing to record GBP values at disposal times — this makes HMRC queries hard to answer.
- ⚠️ Ignoring 30-day and same-day rules — repurchases within 30 days can be matched and change tax outcome.
- ⚠️ Assuming all crypto is trading income — incorrect classification can lead to under- or over-taxation.
Frequently asked questions
Do crypto-to-crypto swaps count as taxable disposals?
Yes. For most investors a crypto-to-crypto exchange is a disposal that can create a capital gain or loss measured in GBP at the time of the swap.
How should the value be calculated when no GBP is involved?
Use the market value in GBP of the asset received at the exact time of the disposal. Keep evidence such as exchange orderbooks, screenshots or API CSVs.
What records does HMRC expect for each disposal?
HMRC expects date/time, asset type and quantity, GBP value at disposal, acquisition cost in GBP, fees, and transaction identifiers. Keep these for at least six years.
How do the 30-day and same-day rules work?
Same-day purchases match first; purchases within 30 days match next; remaining quantity is matched to the pooled holding. This order determines which acquisition cost reduces gain.
Can losses from crypto be carried forward?
Yes. Reported net losses that are unused can be carried forward indefinitely and offset against future capital gains.
Do staking rewards or airdrops create income tax?
Some rewards (stakings) and airdrops may be taxed as income when received; later disposals of those assets can create CGT events. Check HMRC guidance and seek specialist advice if amounts are significant.
How should beginners start if they have many small trades?
Begin by exporting transaction history from exchanges, convert each transaction to GBP at time of transaction, group by asset, and apply matching rules. Consider using a recognised crypto tax tool and seek professional help if complexity increases.
What happens if a past tax return missed crypto gains?
If a taxpayer discovers an omission, correction depends on timing. Many cases allow amendment within one year of filing or voluntary disclosure procedures for older years. Professional advice recommended.
Your next step:
- Gather the last 12 months of exchange CSVs, wallets and receipts and convert each transaction to GBP using a reputable market feed.
- Apply same-day, 30-day and pooling rules to each disposal and compute gains/losses in a spreadsheet.
- If taxable gains exceed the annual exempt amount or totals look significant, include the amounts on Self Assessment and keep all supporting records.