Knowing how to calculate crypto gains is the single most useful skill any UK investor can have at tax time, and the part almost everyone gets wrong. It is not as simple as sale price minus what you paid. HMRC requires a specific set of matching rules, applied in a specific order, to work out the cost of whatever you sold. Get the order wrong or the sterling values wrong, and your figures will not match what HMRC expects.
This guide explains exactly how to calculate crypto gains under HMRC’s share pooling rules, with worked examples for each of the three matching rules. At Crypto Tax Solution, reconstructing these calculations across years of trading history is what we do, but this guide gives you the full method whether you tackle it yourself or not.
Why Calculating Crypto Gains Is More Complex Than It Looks
When you dispose of a cryptoasset, whether by selling for sterling, swapping for another token, or spending it, you make a disposal for Capital Gains Tax purposes. The gain is the sterling value at disposal minus the allowable cost of what you disposed of.
The difficulty is that word “cost”. If you have bought the same token many times at different prices, which specific purchase does the sale relate to? Crypto does not follow simple first-in-first-out logic. Instead, HMRC requires three matching rules to be applied in strict order to establish the cost of any disposal. Understanding these three rules is the whole game.
The Three HMRC Matching Rules, in Order
To calculate crypto gains correctly, you apply these rules one after another. Only if a rule does not fully match your disposal do you move to the next.
1. The same-day rule. Any tokens you dispose of are first matched against tokens of the same type that you acquired on the same day.
2. The 30-day rule (bed and breakfasting). Any disposal not matched on the same day is then matched against tokens of the same type you acquire in the following 30 days.
3. The Section 104 pool. Anything still unmatched is matched against your Section 104 pool, an average-cost pool of all your earlier acquisitions of that token.
Most disposals for ordinary investors end up matched against the Section 104 pool, because the same-day and 30-day rules only apply if you happen to buy the same token around the same time you sell it. But when they do apply, they override the pool, and this is where mistakes happen.
The Section 104 Pool: How Most Crypto Gains Are Calculated
The Section 104 pool is the method behind the majority of crypto gain calculations, so it is worth understanding first. The pool works on average cost. Every time you buy a token, you add both the quantity and the sterling cost to the pool. Your cost basis per unit is simply the total pooled cost divided by the total units held.
Worked example. Suppose you buy 1 BTC for £20,000, then later buy another 1 BTC for £30,000. Your pool now holds 2 BTC at a total cost of £50,000, giving an average cost of £25,000 per BTC.
If you then sell 1 BTC for £40,000, your cost basis is the pooled average of £25,000. Your gain is £40,000 minus £25,000, which is £15,000. After the sale, the pool holds 1 BTC with a remaining cost of £25,000. This averaging is why the Section 104 pool is sometimes the only thing standing between an investor and a wildly incorrect tax figure.
The Same-Day Rule: A Worked Example
When you buy and sell the same token on the same day, HMRC treats those transactions together, using the average cost and average sale price for everything traded that day, before the Section 104 pool is even touched.
Worked example. On 15 July you sell 0.5 BTC and, on the same day, buy 0.3 BTC. The 0.3 BTC bought that day is matched against the disposal first under the same-day rule. That leaves 0.2 BTC of the disposal unmatched, which then moves down to the 30-day rule, and if still unmatched, to the Section 104 pool.
The 30-Day Rule (Bed and Breakfasting): A Worked Example
The 30-day rule exists to stop what is known as “bed and breakfasting”, selling a token to crystallise a loss, then immediately buying it back to keep your position. Without this rule, investors could manufacture tax losses without ever really changing what they hold.
Worked example. You hold 1 ETH in your Section 104 pool, bought earlier for £20,000. On 5 January you sell 1 ETH for £18,000, apparently crystallising a £2,000 loss. But on 10 January, within 30 days, you buy 1 ETH back for £19,000.
Because of the 30-day rule, the 5 January disposal is matched against the 10 January repurchase, not the original pool. The loss becomes £18,000 minus £19,000, which is just £1,000, not the £2,000 you were expecting. The original 1 ETH with its £20,000 cost stays untouched in the pool. This is exactly the kind of subtlety that trips up investors calculating their own gains.
Why Exchange CSV Exports Rarely Give the Right Answer
Many investors assume they can download a CSV from their exchange and read off their gains. In practice, this is where most self-calculated figures go wrong, for reasons that have nothing to do with the matching rules themselves.
Exchange exports frequently miss internal transfers between your own wallets, transaction fees that form part of the allowable cost, dust conversions, staking rewards, rebates, and airdrops, all of which affect either the sterling cost basis or the disposal proceeds. Worse, a single investor using several exchanges has no single export that captures the full Section 104 pool, because the pool spans every platform and wallet you hold, not just one.
Every acquisition and disposal must also be converted to its sterling value at the date and time it occurred, which exports often do not do accurately. These issues compound across years of activity, which is why reconstructed figures so often differ significantly from what an exchange summary suggests.
Do Companies Calculate Crypto Gains the Same Way?
Broadly yes, but with one key difference. Companies use share pooling under Section 104 in a similar way to individuals, and the same-day rule applies identically. However, the 30-day bed and breakfasting rule for individuals is instead a 10-day rule for companies. Company crypto gains are also taxed under Corporation Tax rather than Capital Gains Tax, which we cover fully in our guide to crypto limited company tax.
Putting It Together: The Full Calculation Process
To calculate crypto gains for a tax year from start to finish:
- Gather every transaction across every wallet and exchange, not just one platform
- Convert each acquisition and disposal to its sterling value at the time it occurred
- For each disposal, apply the same-day rule first, then the 30-day rule, then the Section 104 pool
- Calculate the gain or loss on each disposal as proceeds minus matched cost
- Add up all gains and losses for the year
- Deduct the annual exempt amount, currently £3,000, then apply the correct rate
For the current rates and the annual exempt amount that apply once you have your total gain, see our guide to crypto capital gains tax. If your activity looks more like trading than investing, the treatment changes entirely, as explained in our guide to crypto trader vs investor. And if some of your positions made a loss, our guide to claiming crypto losses explains how to use them.
How Crypto Tax Solution Helps
Applying three matching rules in the right order, across every wallet and exchange, with accurate sterling valuations at each transaction, over several years of activity, is genuinely difficult to do by hand. This is exactly the work we specialise in. We reconstruct your full transaction history, apply the correct share pooling treatment, and produce figures you can rely on for your Self Assessment return.
You can try our crypto tax calculator for an initial estimate, see our prices for a full reconstruction, or get in touch via our contact page. You can also read HMRC’s own guidance on the Cryptoassets Manual for the underlying rules.
Frequently Asked Questions: How to Calculate Crypto Gains
How do you calculate crypto gains in the UK?
You calculate the gain on each disposal as the sterling proceeds minus the allowable cost, where the cost is established using HMRC’s three matching rules in order: the same-day rule, the 30-day rule, and then the Section 104 pool. Total gains for the year, less the annual exempt amount, are then taxed at the applicable rate.
What is the Section 104 pool for crypto?
The Section 104 pool is an average-cost pool of all your acquisitions of a particular token. Your cost basis per unit is the total pooled cost divided by the total units held. Most crypto disposals are matched against this pool unless the same-day or 30-day rules apply first.
What is the crypto same-day rule?
The same-day rule matches any tokens you dispose of against tokens of the same type you acquired on the same day, before any other rule is applied. The average cost and average sale price for that day are used.
What is the 30-day rule for crypto?
The 30-day rule, also called bed and breakfasting, matches a disposal against any reacquisition of the same token within the following 30 days, using the repurchase cost rather than the pooled cost. It prevents investors from crystallising artificial losses by selling and immediately rebuying.
In what order do the crypto matching rules apply?
They apply strictly in order: first the same-day rule, then the 30-day rule, then the Section 104 pool. You only move to the next rule if the disposal is not fully matched by the previous one.
Can I just use my exchange’s CSV export to calculate gains?
Usually not accurately. Exchange exports often miss internal transfers, fees, dust conversions, staking rewards, and airdrops, and no single export covers a Section 104 pool that spans multiple platforms. Transactions also need converting to sterling at the time they occurred, which exports frequently do not do correctly.
Does swapping one crypto for another count as a disposal?
Yes. Swapping one token for another is a disposal of the first token for Capital Gains Tax purposes, calculated using the sterling value at the time of the swap. This is one of the most commonly missed disposals when investors calculate their own gains.
Do companies calculate crypto gains the same way as individuals?
Largely yes, using share pooling and the same-day rule identically. The main difference is that the 30-day bed and breakfasting rule for individuals becomes a 10-day rule for companies, and company gains are taxed under Corporation Tax rather than Capital Gains Tax.
What is the annual exempt amount for crypto gains?
The Capital Gains Tax annual exempt amount is currently £3,000, reduced from £6,000 in the 2024/25 tax year. You deduct this from your total gains for the year before applying the relevant tax rate.
Do I need to include transaction fees when calculating crypto gains?
Yes. Allowable transaction fees form part of the cost basis of an acquisition or reduce the proceeds on a disposal, so including them accurately affects your final gain. Fees are one of the items most commonly omitted from self-calculated figures.
This article provides general educational guidance on how to calculate crypto gains in the UK and does not constitute tax advice. Crypto tax rules can change. Please contact Crypto Tax Solution for advice tailored to your specific circumstances.
