UK tax on crypto ETNs and direct crypto

Most people researching this expect to find that one route is taxed more favourably than the other. They are not. Both crypto ETNs and directly held cryptoassets are chargeable to capital gains tax at the same rates, with the same annual exempt amount. The difference is entirely in the administration — and the administration is where people actually get caught out.

The rates and allowance

The mechanic that catches people out is that the 18%/24% split is not a property of the asset. It depends on your income. The gain is stacked on top of your taxable income for the year: the part that fits inside your remaining basic-rate band is charged at 18%, and everything above it at 24%. A large gain in a year when you also had a large salary is taxed differently from the same gain in a year when you did not.

How a crypto ETN is taxed

Outside a wrapper, straightforwardly. You bought the note at a price, you sold it at a price, and the difference less allowable costs is a chargeable gain. Your broker issues a consolidated tax certificate. One line.

Inside a wrapper, the picture changed materially on 6 April 2026. Crypto ETNs are now qualifying investments for an Innovative Finance ISA only — a wrapper most mainstream investment platforms do not offer. Holdings acquired in a stocks and shares ISA before that date were not forced out and continue to grow free of CGT. Everything else is a taxable account. The full history is on our ISA page, and it is the single most financially significant fact on this site.

How directly held cryptoassets are taxed

Same rates, same allowance, and a much wider definition of what triggers a charge.

A disposal for CGT purposes includes selling cryptoassets for pounds — but also swapping one cryptoasset for another, using cryptoassets to pay for goods or services, and giving them away to anyone other than a spouse or civil partner. Each of those events requires you to work out a sterling value at the moment it happened and calculate a gain against a pooled cost base.

This is where the routes genuinely diverge. Someone who has traded between half a dozen coins on two exchanges over three years may have hundreds of chargeable disposals, none of which involved money leaving the crypto ecosystem, and all of which have to be computed.

Share pooling: the real difference

HMRC applies the same share identification rules to cryptoassets that it applies to shares. There are three matching rules, applied in strict order, and they are the reason crypto tax software exists as a product category.

1. Same-day rule. A disposal is first matched against any acquisition of the same asset on the same day.
2. Thirty-day rule (bed and breakfasting). Next, against acquisitions in the following 30 days. This exists to stop people selling to crystallise a loss and immediately rebuying.
3. Section 104 pool. Whatever remains is matched against the pool: a running total of every unit you hold and the aggregate sterling cost of acquiring them, giving an average cost per unit.

A separate pool is kept for each distinct cryptoasset. Every acquisition adds to the pool and every disposal removes a proportional slice of it. Get the pool wrong at any point and every subsequent calculation is wrong too.

Staking payouts and other income

Capital gains is not the only tax that can arise. Where cryptoassets generate a return rather than only changing in value, HMRC's treatment can fall under income tax instead, depending on the circumstances and the degree of activity involved.

This matters more than it used to, because staking has arrived inside listed products. Grayscale's ETHE became the first US crypto ETP to distribute a staking payout to shareholders on 5 January 2026, and BlackRock's ETHB launched on 12 March 2026 paying its staking payout monthly. Several London-listed ether notes accrue a staking payout inside the product rather than distributing it — CoinShares funds a zero management fee from exactly that source.

Whether a payout you receive is income or capital, and when it is recognised, is a genuinely technical question that depends on the product structure and your circumstances. We are not going to give you a rule here because there is not a short one. If you hold a product that distributes, take advice.

Stamp duty

For directly held cryptoassets the position is clear: HMRC has indicated that exchange tokens are unlikely to meet the definition of stock, marketable securities or chargeable securities, so there is no stamp duty on a transfer.

For listed notes the position is instrument-specific rather than universal, and depends on the structure and the venue. Exchange traded funds have a specific stamp duty and SDRT exemption in UK law; how that interacts with a particular cryptoasset note is a question for that product's documentation. Your broker will apply whatever is due at the point of dealing, and it will show on the contract note. If the number matters to your decision, ask before you deal rather than after.

What records to keep

For a listed note, keep every contract note. That is the acquisition record and it contains everything you need: date, quantity, price, costs. Your broker's consolidated tax certificate does most of the rest.

For directly held cryptoassets, you need considerably more:

• The type of cryptoasset and the date of every transaction
• Whether it was an acquisition or a disposal, and the number of units
• The value in pounds sterling at the time of the transaction
• The running total of units held after each transaction, per asset
• Bank statements and wallet addresses supporting the transactions
• A record of pooled costs, maintained continuously

Exchanges close, and when they do their transaction history goes with them. Export your data periodically rather than assuming you can retrieve it years later when you need it. This is unglamorous advice and it is the single most useful thing on this page for anyone holding directly.

Five expensive mistakes

Assuming a swap is not a disposal. Exchanging bitcoin for ether is a disposal of bitcoin at market value. No money left the ecosystem; a chargeable event still occurred.

Forgetting the 30-day rule. Selling at a loss in March to use the allowance, then buying back the same asset a week later, does not produce the loss you expected. The disposal is matched against the repurchase.

Selling a grandfathered ISA holding. A crypto ETN held in a stocks and shares ISA from before 6 April 2026 cannot be replaced inside that wrapper once sold. The shelter attaches to the position.

Ignoring a fund liquidation. If a sponsor closes a product, you receive cash at NAV and have made a disposal in that tax year, on a date you did not pick.

Assuming no withdrawal means no tax. The most common and most expensive of the five. Gains are taxed on disposal, not on withdrawal to a bank account.