UK crypto tax worked example, step by step

To work out UK Capital Gains Tax on crypto, you match every disposal in a fixed order: first against tokens of the same type you acquired that day, then against tokens of that type you acquire in the next 30 days, and only then against the average cost of your Section 104 pool. Fees go into your costs, every swap is a disposal, and your net gains for the year above the £3,000 allowance are taxed at 18% or 24% for 2026 to 2027. The example below follows one invented trader through a year so you can see each rule do its job.

This page follows HMRC's published rules at the time of writing (October 2026). It is not personal tax advice: for large sums or anything unusual, speak to an accountant who understands cryptoassets. For the basics, such as what counts as a disposal and when to report, read memecoins and tax in the UK first.

In what order does HMRC match crypto disposals?

HMRC applies the same-day rule first, then the 30-day rule, and only uses the Section 104 pool for whatever is left. That order comes from HMRC's Cryptoassets Manual on pooling, which applies the same rules used for shares. Each type of token has its own pool, so SOL, Coin A and Coin B below are tracked separately.

Sam's year at a glance

Sam is a UK resident who invests rather than trades as a business. Every number is invented, Coin A and Coin B are made-up memecoins, and values are in pounds at the time of each trade.

How are fees treated?

Transaction fees are allowable costs. HMRC's manual on allowable expenditure says a fee on buying is part of the cost, a fee on selling is deducted from the proceeds, and a fee on a token-for-token swap can be split 50/50 between the token you give up and the token you get.

So each £4 swap fee here becomes £2 off the disposal and £2 added to the cost of the new tokens. Strictly, a fee paid in tokens is also a tiny disposal of those tokens (HMRC manual page CRYPTO22280). We leave that out because it changes the result by pennies.

Step 1: building the SOL pool

Sam's first two buys go straight into the pool, with the fees added to cost:

• 20 SOL for £2,000 + £20 = £2,020
• 30 SOL for £4,500 + £30 = £4,530
• Pool: 50 SOL costing £6,550, an average of £131 per SOL

Is buying a memecoin with SOL a disposal?

Yes. When Sam swaps 10 SOL for Coin A on 3 July, he disposes of 10 SOL. His proceeds are the value of what he received, £1,500, less £2 of fee. His Coin A costs £1,500 + £2 = £1,502.

The cost of those 10 SOL does not come from the pool, though, because Sam acquired more SOL that day and again within 30 days.

How does the same-day rule work for crypto?

All acquisitions and disposals of the same token on the same day are treated as one acquisition and one disposal, and matched against each other first. On 3 July this happens twice.

Coin A. Sam acquired 2,000,000 for £1,502 and disposed of 1,000,000 the same evening. Half the day's cost is matched:

• Proceeds £1,200, less fee £2, less cost £751 = gain of £447
• The other 1,000,000 Coin A go into a Coin A pool at £751

SOL. Sam disposed of 10 SOL and acquired 8 SOL that day. The 8 SOL he acquired (cost £1,200 + £2 = £1,202) are matched against 8 of the 10 he disposed of. That leaves 2 SOL from the morning swap still to match.

How does the 30-day rule work for crypto?

If you acquire tokens of the same type within 30 days after a disposal, they are matched to that disposal before the pool is used. This is the "bed and breakfast" rule. On 20 July, 17 days later, Sam buys 5 SOL for £705 including the fee.

• 2 of those SOL are matched to the 3 July disposal: £705 × 2/5 = £282
• The other 3 SOL (£423) go into the pool

Now the 3 July SOL disposal can be finished: £1,500 proceeds, less £2 fee, less £1,202 same-day cost, less £282 thirty-day cost = gain of £14. The pool average would have given those 2 SOL a cost of £262 instead.

Key point: Memecoin traders swap SOL out and get SOL back all the time, often within a day or a few weeks. That means the same-day and 30-day rules decide the cost of a lot of SOL disposals, not the pool.

Step 2: the remaining SOL pool

Nothing entered or left the pool on 3 July, because both sides were fully matched. The rest of the year:

The workings:

• 10 Aug: cost £6,973 × 6/53 = £789.40. Gain: £900 - £2 - £789.40 = £108.60. Coin B costs £900 + £2 = £902.
• 15 Sep: Coin A pool cost £751. Result: £320 - £2 - £751 = loss of £433. The 2 SOL received cost £322 and go into the pool, as there was no SOL disposal that day or in the 30 days before.
• 1 Feb: cost £6,505.60 × 40/49 = £5,310.69. Gain: £10,000 - £40 - £5,310.69 = £4,649.31.

Sam still holds 9 SOL, which matches the pool.

Can you claim a loss on a coin that rugged?

Yes, if the tokens have become of negligible value while you still hold them. A negligible value claim treats them as sold and bought back at the value you state, which can be £nil, and HMRC's manual on negligible value says the claim covers your whole pool of that token.

Sam's Coin B pool is 3,000,000 tokens costing £902. When he reports, he claims that they were of negligible value on 1 December 2026, while he still held them. The law allows a date up to two years before the start of the tax year you claim in, if you owned the tokens and they were already worthless then. Result: a loss of £902. A claimed loss must be reported to HMRC within four years of the end of the tax year (GOV.UK on losses).

What does Sam owe for 2026 to 2027?

Same-year losses are set against same-year gains in full before the allowance is applied:

GOV.UK lists the rates and allowance for 2026 to 2027 as £3,000, with rates of 18% and 24%. If all of Sam's taxable gain falls inside his unused basic rate band, he owes £883.91 × 18% = £159.10. If he is a higher rate taxpayer, it is £883.91 × 24% = £212.14.

Without the negligible value claim, his taxable gain would be £1,785.91 and the bill £321.46 or £428.62. Because his net gains are over £3,000, he needs to report them.

What records does HMRC want you to keep?

HMRC's guidance on selling cryptoassets asks for separate records of each transaction for each pool: the type of token, the date of disposal, how many you disposed of, how many you have left, the value in pounds, bank statements, and the pooled cost before and after. Here is how Sam's log looks with those columns, plus a note of which rule matched each disposal:

Also keep each swap's transaction ID, the price source you used to value it in pounds (the same one every time) and dated evidence that a rugged coin really was worthless, such as screenshots of the drained pool and chart.

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