Published: October 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 HMRC tax year. All calculations, 18%/24% Capital Gains Tax rates, Section 104 pooling rules, and CARF compliance standards comply with current UK tax legislation.
Earning cryptocurrency rewards through Proof-of-Stake (PoS) staking, decentralized finance (DeFi) liquidity pools, and protocol airdrops is subject to a dual-layer tax structure under HMRC rules. Understanding how Income Tax and Capital Gains Tax interact is crucial for avoiding severe penalties.
Layer 1: Income Tax Upon Receipt
Under HMRC guidance (CRYPTO21200), staking rewards and DeFi interest are classified as Miscellaneous Income. You must record the fair market value in GBP on the date each reward is credited to your wallet. This amount is taxed at your marginal Income Tax rate (20%, 40%, or 45% in England; 19% to 48% in Scotland).
Layer 2: Capital Gains Tax on Eventual Sale
The GBP market value established when you received the staking reward becomes the allowable acquisition cost basis for your Section 104 pool. When you eventually sell, swap, or spend those reward tokens, you will pay Capital Gains Tax (18% or 24%) on any price appreciation above that initial cost basis.
Model your exact staking and yield liabilities using our free Crypto Staking & DeFi Tax Calculator.
Calculate Your Capital Gains Tax Liability
Put the figures from this guide into practice with our free, HMRC-audited interactive calculation tools: