How Are Staking Rewards Taxed in the UK? Income and CGT

The confusion here is not about whether staking is taxed. It is about how many times, and people who answer "income" or "capital gains" are each half right in a way that produces the wrong number.

Two tax points, one set of tokens

Point one, receipt. Mining, staking and airdrops are taxed as income at their sterling value when you receive them, at your marginal rate of 20%, 40% or 45% after the personal allowance of 12,570 pounds. That is income tax on tokens you have not sold.

Point two, disposal. That same receipt value becomes the cost base for CGT when you later dispose of the coins. The gain is the disposal proceeds less that cost base, taxed at 18% for basic rate taxpayers and 24% for higher or additional rate taxpayers on gains above the annual exempt amount of 3,000 pounds for 2025/26 and 2026/27. Verify current figures with HMRC before relying on them.

The link between the two points is the important part. Because the receipt value is the cost base, the income you already paid tax on is not taxed again as gain. What is taxed at point two is only the movement in value after receipt. People who ignore point one and treat the whole disposal proceeds as gain overpay; people who ignore point two entirely underpay.

Rewards go into your Section 104 pool

HMRC uses Section 104 pooling, an averaged cost across all units of a given token, plus the same day rule and the 30 day rule.

Staking rewards in a token you already hold do not sit in their own bucket. They join the pool at their receipt value, moving the pool average. So a year of rewards received at high prices raises your average cost for the whole holding, and a year received at low prices lowers it. You cannot dispose of "just the rewards" and leave the original holding untouched, because after pooling there is only one averaged cost for that token.

What HMRC's own guidance covers

HMRC's Cryptoassets Manual sets out the detail, including DeFi, staking and NFTs. It is the right reference for edge cases, and it is worth knowing it distinguishes situations by what is actually happening economically rather than by product name, so a protocol calling something staking does not settle the treatment.

The practical problems

• Volume. Rewards can arrive per epoch or per day, and each arrival is its own income event needing a sterling value at its own timestamp.
• Liquid staking derivatives. Receiving a token that represents your staked position, and whose value drifts upward rather than paying discrete rewards, raises both whether the initial exchange was a disposal and when the yield is received. This is a judgement area.
• Exchange staking. The exchange may report a total for the year without the per receipt values you actually need.

Reporting

Staking income is reported through Self Assessment on the SA100 as miscellaneous income. Disposals go on the SA108 Capital Gains Summary in the cryptoassets section. You must report if net gains exceed the annual exempt amount, or if total disposal proceeds exceed 50,000 pounds in the tax year even where no tax is due.

The tax year runs 6 April to 5 April, with an online filing and payment deadline of 31 January. From 1 January 2026, UK crypto platforms report user data to HMRC under CARF, with the first reports covering the whole of 2026.

Our UK crypto tax guide covers pooling and the reporting thresholds in full.

General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.