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UK Crypto Tax Allowances: What Is Actually Tax Free?
Understand the UK £3,000 Capital Gains Tax annual exempt amount, income allowances and why mining rewards are not automatically tax free.
The £3,000 annual exempt amount applies to net chargeable gains, not the value of crypto sold and not mining income. Income allowances have separate conditions.
TL;DR
- The £3,000 annual exempt amount applies to net chargeable gains, not the value of crypto sold and not mining income. Income allowances have separate conditions.
- Keep contemporaneous GBP valuations and evidence for income, acquisitions and disposals.
- Use current HMRC guidance and obtain qualified advice for the facts of your operation.
The Capital Gains Tax annual exempt amount
For individuals in 2026/27 the annual exempt amount is £3,000. It applies across chargeable gains for the year, not separately to each wallet, token or exchange.
Proceeds are not gains
Selling £10,000 of Bitcoin does not mean a £10,000 gain. The calculation uses disposal proceeds, allowable costs, matching rules and losses. Reporting duties can still arise even where tax is nil.
Mining income is separate
The annual exempt amount does not shelter mining reward income. Non-trading rewards may be miscellaneous income and appropriate expenses may be deductible. Trading cases follow trading rules.
The trading and miscellaneous-income allowance
A £1,000 trading allowance can apply to certain gross trading or miscellaneous income, but it cannot be combined with actual expenses for the same income and its interaction with other income sources must be checked.
Companies do not use individual allowances
A company accounts for profits and gains within Corporation Tax and does not claim an individual's annual exempt amount. Use company accounts and advice.
Useful next steps
Authoritative references
Use current official guidance because tax rules and HMRC guidance can change.
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