August 31, 2026
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In the US and the UK, buying crypto and holding it while the price climbs costs you nothing in tax. Tax is owed when you sell, swap or spend coins, and on crypto you receive as pay or rewards. As of October 2026, a US gain on a coin held longer than a year is taxed at 0%, 15% or 20% depending on your income, and in the UK gains above a £3,000 yearly allowance are taxed at 18% or 24%.
In the US, the IRS treats crypto as property, not as currency (IRS Notice 2014-21, still in force in October 2026). In the UK, as of October 2026, HMRC taxes tokens as assets under Capital Gains Tax, the same tax that applies when you sell shares. So the question each time is the one you would ask about a share: did you get rid of the coin, and for more or less than it cost you?
Under US and UK rules as of October 2026, getting rid of crypto, called a disposal, includes:
These, as of October 2026, create no tax in either country:
A swap counts the same wherever it happens: on a big exchange that holds your account, or on a decentralized exchange you connect your wallet to. The difference shows up at tax time. A centralized exchange keeps a history you can download, while a decentralized one keeps no account in your name, so the record lives in your wallet and on the blockchain. If you are not sure which kind you have been trading on, here is how centralized and decentralized exchanges differ.
Yes, if you have already sold. The tax moment is the sale on the exchange, not the withdrawal to your bank account.
Say Maria sells 1 ETH for $3,000 on an exchange in March 2026 and leaves the dollars there until December. In the US the gain belongs to tax year 2026, because the US tax year is the calendar year. In the UK the same sale falls in tax year 2025/26, because the UK tax year runs from 6 April to 5 April.
When Maria later moves the dollars to her bank, nothing new happens: she is moving her own money. The reverse is also true. If you never sell, withdrawing coins from an exchange to your own wallet creates no tax in either country.
Some crypto arrives without you buying it. Both countries tax it as income at the moment it arrives, and only later as a capital gain when you dispose of it. The details depend on how the coins came to you.
In the US, as of October 2026, crypto received for work, goods or mining counts as gross income at its fair market value in dollars on the day you receive it (IRS Notice 2014-21). That same dollar value becomes your cost basis, the starting price for working out a later gain. A client pays you 0.01 BTC worth $1,000 that day: you have $1,000 of income. If you sell the coins months later for $1,200, the extra $200 is a capital gain. The practical side of being paid this way, from invoices to which coin to ask for, is covered in how to get paid in crypto as a freelancer.
Staking, locking up coins to help run a network in exchange for new coins, follows the same logic. Under Revenue Ruling 2023-14, US staking rewards are income in the tax year you gain control of them, which in plain terms means the moment you can sell or move them. In the UK, as of October 2026, staking and mining that are not a trade are taxed as miscellaneous income at the pound value of the tokens when you receive them (CRYPTO21200 and CRYPTO21150).
In the US, crypto paid as salary is income at its dollar value on payday, like any other payment for services (IRS Notice 2014-21, as of October 2026). In the UK, HMRC treats tokens from an employer as earnings, so Income Tax and National Insurance are due on them just as on cash pay (CRYPTO21100, as of October 2026).
Airdrops, tokens a project hands out to wallets, are where the two countries differ most. In the US, the IRS says new coins from a hard-fork airdrop are income in the year you receive them. In the UK, as of October 2026, HMRC taxes an airdrop as income when you got it in return for doing something, while tokens that simply landed in your wallet may not be income at all (CRYPTO21250). Selling them later can still produce a capital gain. If you are not sure which kind you received, start with what a crypto airdrop is and how projects run them.
The gain is what you got for the coin minus what it cost you, including fees. How that gain is taxed depends on how long you held the coin, and the dividing line is one year (26 U.S.C. § 1222, as of October 2026):
For tax year 2025, the IRS set the 0% rate for single filers with taxable income up to $48,350, and $96,700 for married couples filing jointly. The 15% rate ran up to $533,400 for single filers and $600,050 for joint filers, with 20% above that. The IRS raises these thresholds each year for inflation, so the 2026 figures are slightly higher.
Here is how the holding period plays out. Sam buys 0.1 BTC for $6,000 in February 2025 and sells it for $9,000 in May 2026. He held it for more than a year, so the $3,000 gain is long-term, and at the 15% rate he owes $450. Had he sold in December 2025, the same $3,000 would have been short-term and taxed at his ordinary income rate, together with his salary.
In the US, a loss on crypto reduces tax rather than adding to it, but you still report the sale. As of October 2026, capital losses first cancel out your capital gains. If losses are bigger than gains, up to $3,000 of the difference a year ($1,500 if married filing separately) reduces your other income, and the rest carries forward to later years (IRS Topic 409).
In the UK, crypto gains fall under Capital Gains Tax. As of October 2026 the rates are 18% on gains that fit inside your basic rate Income Tax band and 24% on anything above it. Those rates have applied since 30 October 2024 and stay the same for tax year 2026/27.
Every individual gets an annual exempt amount, the tax-free allowance for gains. It is £3,000 for 2024/25, 2025/26 and 2026/27. It covers all your gains in the year together, from crypto, shares and other assets, not each coin separately.
Say Priya's crypto gains for 2025/26 total £5,000 and she has no other gains. The first £3,000 is covered by the allowance, so £2,000 is taxable. If that £2,000 sits inside her basic rate band, she owes £360. If she is a higher rate taxpayer, she owes £480.
HMRC does not let you pick which bitcoin you sold. Instead, all tokens of one type go into a single pool, and each sale takes its cost as a share of the pool's total cost, in effect the average price you paid. Two rules come before the pool (CRYPTO22200, as of October 2026):
The 30-day rule matters for anyone who sells to lock in a loss and buys straight back. The loss is worked out against the price of the coins you bought back, not against your older average cost, so if the price barely moved in between, most of the loss disappears.
As of October 2026, a UK loss is deducted from your gains in the same tax year first. You have to claim it within four years after the end of the tax year in which you sold. Unused losses carry forward, and in later years they are used only to bring your gains down to the £3,000 allowance, so the rest of the loss keeps for another year.
A US return for tax year 2026 is filed in 2027. As of October 2026, crypto reaches it in a few steps:
Form 1099-DA is the new statement from brokers, the exchanges and apps that hold crypto for you. For transactions from 1 January 2025, brokers report your gross proceeds to you and to the IRS. They report your cost basis only for coins bought from 1 January 2026 and kept in an account with that same broker. A coin bought in 2023 or moved in from another wallet will often show proceeds but no basis, and the basis then comes from your own records.
The broker can put your name on that form because it checked your identity when you opened the account. If you have wondered why an exchange wanted a passport photo in the first place, here is why crypto exchanges ask for your ID.
Under 26 U.S.C. § 6072, a calendar-year return is due on 15 April, so the return for tax year 2026 is due on 15 April 2027. Form 4868 gives an automatic six-month extension to file, but not to pay: tax owed is still due in April.
In the UK, crypto gains are reported through a Self Assessment tax return. As of October 2026, you need to report them when either is true:
The capital gains pages of the return, form SA108, have their own Cryptoassets section, boxes 13.1 to 13.8, for 2024/25 and 2025/26. That is where your disposals, proceeds, costs and gains go.
For tax year 2025/26, gov.uk sets these deadlines:
Both tax offices want the value of each coin at the moment of each transaction, and no one hands you that in a single document. The safest habit is to keep these for every transaction:
Proving a transfer went to your own wallet is easier than it sounds. The transaction ID and both addresses sit on the public blockchain, and you can find and save the record yourself; here is how to read a crypto transaction in a blockchain explorer.
For trades on an exchange, most platforms let you download your full history as a spreadsheet. Crypto tax calculators import those files, match purchases with sales and produce the lines for Form 8949 or the totals for SA108. They are only as good as the history you feed them, though, so a wallet you forgot to connect shows up as coins with no cost.
In both countries, crypto taxes follow two events: getting rid of a coin and receiving one as income. Holding, buying with cash and moving coins between your own wallets cost nothing. Swaps and small payments count as disposals, so the records matter more than the size of the trade.
The next dates to keep in mind:
Everything here is about crypto you own personally. If customers pay a business you run in crypto, that money belongs on the company's books, and accounting for crypto your business gets paid in follows its own rules.
Yes. As of October 2026, the IRS says crypto gains, losses and income are reported regardless of the amount and whether or not you got a tax form. The $600 figure belongs to Forms 1099-MISC and 1099-NEC, which businesses send to people they pay, and for payments made from 2026 that threshold is $2,000. Neither number decides whether you owe tax.
You still report every disposal. On Form 8949 such sales go in box I for short-term and box L for long-term, the boxes for digital asset transactions with no 1099-DA (US, as of October 2026). Download the history from the exchange or wallet and take dates, proceeds and costs from it.
Increasingly, yes. From 1 January 2026, UK crypto platforms collect details of their users and transactions under the Reporting Cryptoasset Service Providers Regulations 2025 and report them to HMRC every year by 31 May, covering users who are tax resident in the UK and in other countries that signed up to the same rules. The first report, covering 2026, is due by 31 May 2027.
This article explains general rules and is not tax or legal advice; for your own situation, talk to a qualified tax adviser in your country.
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