Antminer Z15 Pro
Zcash & Horizen ASIC Miner
860KSOL
HASHRATE
3.3W/KSOL
EFFICIENCY
2838W
POWER
£1417.20
EST. MONTHLY
9
Months
EST. ROI
Learn how UK crypto cost basis matching works through same-day, 30-day and Section 104 pooling, including mined tokens, fees and GBP records.
TL;DR
- UK crypto gains are not normally calculated by choosing FIFO or LIFO. Statutory matching rules identify which acquisition cost is used for each disposal.
- Keep contemporaneous GBP valuations and evidence for income, acquisitions and disposals.
- Use current HMRC guidance and get qualified advice for the facts of your operation.
UK crypto cost basis in simple English
UK crypto cost basis: Where a mining reward has been taxed as income, the sterling value brought into income is relevant when establishing the later acquisition cost.
Simple example
A UK business owner is checking UK crypto cost basis. Disposals are generally matched first with acquisitions of the same asset on the same day, then qualifying acquisitions in the following 30 days, and then the Section 104 pool.
Key terms in plain English
- Wall power:
- The electricity measured at the socket or supply. It includes losses that a headline chip figure may leave out.
- Mining pool:
- A service that combines work from many miners and shares rewards using stated rules.
- Share:
- Proof sent by a miner to show completed work. A pool uses accepted shares when calculating rewards.
- Difficulty:
- A network value that changes how hard it is to find a valid block. Rising difficulty can reduce the expected reward for the same hashrate.
- Firmware:
- Software stored on the miner that controls its hardware. Use a trusted source and check model compatibility.
The matching order
Disposals are generally matched first with acquisitions of the same asset on the same day, then qualifying acquisitions in the following 30 days, and then the Section 104 pool. Each token type has its own pool.
Section 104 pooling
The pool tracks the total quantity and pooled allowable cost of a particular asset. Part disposals use a proportion of that pooled cost. Maintain the pool continuously and process events in the correct order.
How mined tokens enter the records
Where a mining reward has been taxed as income, the sterling value brought into income is relevant when establishing the later acquisition cost. Trading stock follows business rules. Keep the reward valuation linked to the token quantity and wallet.
Fees and token swaps
A token-to-token exchange is normally a disposal and acquisition. Some transaction and exchange fees can be allowable. Where one fee relates to both sides, HMRC accepts a just and reasonable apportionment and warns that a cost can be deducted only once.
Software needs checking
Tax software can automate matching but cannot determine beneficial ownership, correct missing data or decide whether a DeFi transfer is a disposal. Reconcile quantities and inspect exceptions before relying on the output.
Practical checks for UK crypto cost basis
Start with the exact equipment, network or service described in this guide. Record the model, firmware, rated and measured wall power, supported algorithm, pool endpoint and the date on which each fact was checked. A product name or broad algorithm label is not enough to prove compatibility.
For mining tax, regulation and compliance, calculate the position using the electricity tariff actually payable, pool fees, rejected shares, expected uptime, cooling load and maintenance. Keep gross revenue separate from operating cost. Repeat the calculation with lower revenue and higher difficulty so the downside is visible before money or equipment is committed.
Confirm that fixed wiring, protective devices, cabling, ventilation and access arrangements suit continuous operation. Use a competent electrician where fixed electrical work is involved. Keep firmware and wallet credentials secure, test with one worker first and retain a written baseline so later changes can be compared with evidence.
Keep dated records of coins received, sterling values at the transaction time, wallet addresses, pool statements, exchange records, fees and directly related costs. A later disposal is a separate event from receiving a mining reward. The treatment can also differ between an individual, a sole trade and a limited company. So the facts and the entity must be identified before a return is prepared.
HMRC guidance distinguishes activity carried on as a trade from activity that does not amount to a trade. Frequency, organisation, risk and commercial character can all matter. Do not assume that a label such as hobby, investment or business decides the answer by itself. Retain the evidence used for each valuation and ask a suitably qualified tax adviser about material or unusual transactions.
Frequently asked questions
What is the main point of UK crypto cost basis?
UK crypto cost basis: Where a mining reward has been taxed as income, the sterling value brought into income is relevant when establishing the later acquisition cost.
For UK crypto cost basis, what should a beginner know about the matching order?
Disposals are generally matched first with acquisitions of the same asset on the same day, then qualifying acquisitions in the following 30 days, and then the Section 104 pool.
For UK crypto cost basis, what should a beginner know about section 104 pooling?
The pool tracks the total quantity and pooled allowable cost of a particular asset.
For UK crypto cost basis, what should a beginner know about how mined tokens enter the records?
Where a mining reward has been taxed as income, the sterling value brought into income is relevant when establishing the later acquisition cost.
Conclusion: UK crypto cost
UK crypto gains are not normally calculated by choosing FIFO or LIFO. Statutory matching rules identify which acquisition cost is used for each disposal. Keep contemporaneous GBP valuations and evidence for income, acquisitions and disposals.
Useful next steps
Authoritative references
Use current official guidance because tax rules and HMRC guidance can change.
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