Reform UK's Plan to Cut Crypto Capital Gains Tax by £100M a Year

A new report has revealed that Reform UK is developing plans to cut capital gains tax (CGT) on crypto assets to a flat 10% rate for all UK investors, regardless of whether they currently pay the basic or higher rate. The proposal, if implemented, would represent one of the most significant changes to crypto tax in the UK in years, and HMRC's own data suggests the biggest winners would be a tiny group of very high earners at the top of the market.

What Reform UK Is Actually Proposing

Under current UK rules, crypto assets are treated as capital assets for tax purposes. When you dispose of crypto, whether by selling, swapping, gifting, or spending it, any gain above the annual CGT allowance is taxable. Basic-rate taxpayers pay 18% on crypto gains, while higher and additional-rate taxpayers pay 24%. These rates were set following the October 2024 Budget, which raised them from the previous 10% and 20% levels.

The flat 10% rate

Reform's reported plan would bring both rate bands down to a single 10% rate. That's a 14 percentage point cut for higher-rate payers and an 8 percentage point cut for basic-rate payers. The party has not published a formal policy document, and as of July 2025 its crypto manifesto was removed from its website amid a separate controversy involving donor ties to crypto figures. What is known comes from reporting on internal planning documents and comments attributed to party sources.

The £100 million figure and where it comes from

The £100 million headline comes from applying the proposed rate cut to HMRC's published data on crypto gains. HMRC analysis covering 2025 found that 17,600 UK crypto investors declared capital gains from crypto assets totalling £1.38 billion. Of that total, £717 million was generated by just 240 investors, each of whom made over £1 million in gains in the year. Analysts cited in the report concluded that reducing the tax rate on this group from 24% to 10% would save those 240 individuals more than £100 million annually, and potentially five times that amount over a full five-year parliamentary term.

For context on just how concentrated these gains are, read our analysis of HMRC's crypto capital gains tax statistics and what they reveal about UK filers.

The Political Context You Need to Know

The timing of this report matters. It emerged just days after Reform UK received £72 million in donations from two individuals with significant crypto industry ties: Christopher Harborne, a shareholder in Tether, and Ben Delo, a former executive at BitMEX. Each donated £36 million to the party within a single weekend.

Donor concerns and the overseas cap question

The donations have drawn scrutiny beyond their size. Reporting cited in the source article suggests the contributions may be in breach of the UK government's overseas donor caps, rules designed to prevent foreign money from influencing domestic politics. Harborne's total donations to Reform have now reached £61 million, separate from a £5 million personal payment to party leader Nigel Farage that triggered a referral to the UK's Parliamentary Standards Commissioner.

Reform has not formally responded to questions about the donations. According to the source report, when approached for comment, the party instead directed the story to a publication that ran a more sympathetic framing ahead of a critical piece. This pattern, described in the reporting, has drawn its own criticism.

The removed crypto manifesto

Adding to the complexity, Reform previously published a crypto manifesto on its website outlining pro-crypto policy positions. That document was pulled down in July 2025 during the height of the Harborne-related controversy. The party has not re-published it or formally replaced it with alternative policy positions, meaning the reported CGT cut plans exist without an official public document to anchor them.

What This Means If You're a UK Crypto Investor Today

It's important to be clear: this is a proposal from an opposition party, not law. The current CGT rates of 18% and 24% remain in force. Nothing changes for your next self-assessment filing based on this report alone. But the debate itself has practical implications worth understanding.

How crypto tax in the UK currently works

HMRC treats cryptoassets as a form of property, not currency. Every disposal is a potentially taxable event. The gain is calculated as the difference between what you received and your allowable cost (including acquisition cost and certain transaction fees), using HMRC's share pooling rules. The annual CGT exempt amount is £3,000 for the 2024/25 tax year. Gains above that threshold are taxed at 18% (basic rate) or 24% (higher/additional rate).

Income from crypto, such as staking rewards, mining income, or airdrops treated as miscellaneous income, is subject to Income Tax rather than CGT, at rates of up to 45% depending on your total income. A Reform CGT cut would not affect that element of your liability.

Who would actually benefit from a 10% flat rate

If you're a basic-rate taxpayer with modest crypto gains, the benefit would be real but relatively small: 8 percentage points on taxable gains above £3,000. On a £5,000 gain, that's a saving of around £160. For higher-rate payers with larger portfolios, the saving scales considerably. On £100,000 of taxable gains, a move from 24% to 10% would save £14,000 in a single year. The HMRC data makes clear that the largest absolute savings would flow to the roughly 240 investors with seven-figure annual gains, each of whom could individually save hundreds of thousands of pounds annually.

The economic counterargument

Two tax experts quoted in the source report argued the cuts could damage the broader UK economy. Their concern, standard in public finance analysis, is that significant revenue loss concentrated on high earners is difficult to offset without either cutting public services or raising taxes elsewhere. HMRC's own data shows £1.38 billion in declared crypto gains for 2025, so the Treasury's take from this asset class is already meaningful. A cut to 10% would reduce that take substantially, and the distributional impact, most of the saving going to a very small group of already-wealthy investors, is likely to be a central point of political opposition.

What UK Crypto Holders Should Do Right Now

Whatever the political outcome, your obligations under current law don't wait for elections. HMRC has been actively expanding its crypto reporting infrastructure. It has sent tens of thousands of nudge letters to crypto holders in recent years, and it is now incorporating cryptoasset gains into official UK tax statistics for the first time. You can read more about that shift in our piece on how HMRC is now tracking crypto gains in official UK tax statistics.

Steps worth taking before your next filing

First, record every disposal. That includes trades between crypto assets, not just sales to sterling. HMRC's share pooling rules, specifically the same-day rule, the 30-day bed-and-breakfasting rule, and the Section 104 pool, apply in a specific order and affect which cost basis you use. Getting this right matters whether rates are 24% or 10%.

Second, check whether you've used your £3,000 annual CGT allowance. If you have unrealised gains and haven't yet hit the threshold, disposing of assets to crystallise gains up to that limit can be a legitimate way to reduce your future liability, regardless of what any future government does with rates.

Third, keep your transaction records. HMRC can go back several years, and with crypto-specific data sharing expanding under international frameworks like CARF, the data available to inspectors is growing. A crypto tax calculator that supports UK HMRC rules, including the share pooling methodology, is the most reliable way to ensure your numbers are defensible.

Fourth, if you're a higher-rate taxpayer with significant gains, the current 24% rate is the planning baseline. Any future reduction is a potential upside, but it can't be banked until it becomes law. Making disposal decisions based on anticipated rate cuts from an opposition party carries real risk if the policy never materialises.

The Broader UK Crypto Tax Policy Landscape

Reform's proposal sits within a wider international trend of parties competing for crypto-friendly positioning. In Germany, a planned shift to a 25% flat rate from 2028 would actually increase the tax burden on long-term holders who currently benefit from a tax-free disposal rule after one year. In the US, multiple legislative proposals are working their way through Congress. The UK's own trajectory has been one of tightening, with CGT rates raised in 2024 and HMRC enforcement activity intensifying.

Whether Reform's proposal ever reaches a Budget depends on factors well beyond crypto policy, including the party's electoral performance, broader coalition dynamics, and the political sustainability of the donor controversy that has already forced the removal of its crypto manifesto once. UK crypto holders should watch the debate closely, but plan and file based on the law as it stands.

Source: Protos