HMRC Section 104 Crypto Pooling Rules: 30-Day Bed & Breakfast Explained

When calculating Capital Gains Tax on cryptocurrency in the United Kingdom, one of the most common mistakes is assuming you can pick and choose which purchase lot to sell. Under the Taxation of Chargeable Gains Act 1992 (TCGA 1992 s.104), HMRC mandates that all cryptoassets of the same type (e.g. Bitcoin, Ethereum, Solana) held by an individual must be grouped into a single collective holding known as a Section 104 Pool.

The HMRC 3-Tier Share Matching Order

When a disposal occurs, HMRC applies a strict statutory hierarchy to determine which cost basis matches the tokens sold:

1. 1. The Same-Day Rule (TCGA 1992 s.105): Tokens acquired on the same day as the sale are matched first against the disposal.
2. 2. The 30-Day Bed & Breakfast Rule (TCGA 1992 s.106A): Tokens bought within 30 days after the disposal are matched next.
3. 3. The Section 104 Pool (TCGA 1992 s.104): Any remaining tokens are matched against the weighted average cost of your existing token pool.

Step-by-Step Pooling Mathematical Example

Suppose you make the following transactions in Ethereum (ETH):

• Transaction 1 (Jan 2024): Buy 10 ETH @ £1,500 each (£15,000 total cost). Pool: 10 ETH, £15,000 cost (£1,500/ETH avg).
• Transaction 2 (June 2025): Buy 10 ETH @ £2,500 each (£25,000 total cost). Pool: 20 ETH, £40,000 cost (£2,000/ETH avg).
• Transaction 3 (Oct 2026): Sell 5 ETH @ £3,200 each (£16,000 proceeds).

Disposal Calculation: Allowable Cost = 5 ETH × £2,000 (Pool Average) = £10,000. Chargeable Gain = £16,000 – £10,000 = £6,000.00. Remaining Pool: 15 ETH, £30,000 cost (£2,000/ETH avg).

Track your token pools with our interactive Section 104 Crypto Pooling Calculator.