Crypto Staking Taxes UK
HMRC generally treats staking rewards as miscellaneous income for individuals, taxed at the sterling market value on the date of receipt - provided the activity does not amount to a trade. When you later sell or dispose of those tokens, Capital Gains Tax applies under Section 104 pooling rules, with your income basis as the allowable cost. This page covers both layers for UK Self Assessment filers.
Calculate your UK staking taxes automatically. Upload your exchange CSV or connect your wallet. DYOR.tax identifies staking rewards, records the sterling value at receipt, and separates income from capital gains in your SA100 and SA108 figures.
Try the UK Crypto Tax Calculator - free →How HMRC Treats Staking Rewards
HMRC's cryptoasset guidance, updated 28 November 2025, confirms that tokens received from staking, mining, lending, and liquidity pool arrangements count as income if the person is not carrying on a trade. For most retail stakers, this means:
- Each staking reward is taxable as miscellaneous income in the tax year received
- The amount is the sterling market value on the date of receipt
- It is reported on your SA100 Self Assessment return
- The same value becomes your allowable cost in the Section 104 pool for later CGT
HMRC says only in exceptional circumstances would an individual's staking activity amount to a trade. If it does, the analysis shifts to trading income rules on the SA103 self-employment pages.
Sterling Value at Receipt
"Sterling value at receipt" means the sterling price of the token at the moment the reward is credited to your account or wallet. HMRC does not prescribe a single required pricing source, but requires a consistent, evidenced approach.
Example: Coinbase credits 0.05 ETH to your account as a staking reward. ETH is trading at £2,400 at the time of crediting. You report £120 (0.05 × £2,400) as miscellaneous income for that tax year. That £120 becomes your allowable cost in the ETH Section 104 pool.
Exchange-issued reward history CSVs typically include the sterling or USD value at the time of each reward event. DYOR.tax applies historical exchange rates to convert any USD-denominated values to sterling automatically.
Later Disposal - Section 104 and CGT
When you sell, swap or otherwise dispose of tokens received as staking rewards, Capital Gains Tax arises on the difference between your proceeds and the allowable cost.
The staking reward tokens enter your Section 104 pool at their income basis value - the sterling amount already taxed as income. The pool's weighted average cost is recalculated to include those tokens. On disposal, the standard Section 104 matching order applies: same-day, then 30-day, then pool.
Example: You received 100 tokens as staking rewards when each was worth £2.50, and reported £250 as miscellaneous income. Those tokens are now in your pool at a cost of £250. You sell all 100 tokens for £400. Capital gain = £400 − £250 = £150. The £250 is not taxed again - only the £150 appreciation above your income basis gives rise to CGT.
CGT rates for 2025-26 are 18% (basic rate) or 24% (higher or additional rate), with a £3,000 Annual Exempt Amount. Capital losses on disposal can be set against gains in the same year or carried forward.
Auto-Compounding and Compound Staking
Auto-compounding - where rewards are automatically restaked - is not treated differently. Each automatic crediting of a reward is a taxable income event at sterling value at the time it is credited, even if you did not initiate a manual claim. The frequency of auto-compounding events (daily, weekly, per epoch) means these records can be voluminous. Exchange CSVs or on-chain transaction exports provide the raw data needed.
Protocol Staking vs DeFi Returns
HMRC's guidance distinguishes between straightforward staking and more complex DeFi arrangements. Straightforward staking usually follows the income-at-receipt model; more complex DeFi arrangements may require separate analysis of disposal on entry and the nature of the return.
Protocol staking - delegating tokens to a validator on Ethereum (post-Merge), Solana, or similar proof-of-stake chains - generally follows the straightforward miscellaneous income analysis: reward at receipt is income, later disposal is CGT.
DeFi arrangements - liquidity provision, yield farming, lending protocols, lending your tokens to earn a return - involve additional questions under HMRC's cryptoasset guidance. Two separate issues arise:
- Disposal on entry: if you transfer tokens to a DeFi protocol and beneficial ownership of the original tokens passes to the protocol, HMRC may treat the transfer as a disposal at that point. HMRC's DeFi guidance says this is fact-dependent on whether the protocol takes beneficial ownership.
- Nature of return: whether the DeFi return is capital or revenue in nature also depends on the structure of the arrangement. HMRC's guidance acknowledges this is the most fact-sensitive area in its cryptoasset manual.
For complex DeFi structures, seek advice before assuming the same treatment applies as to straightforward exchange-based staking.
Liquid Staking Tokens
Liquid staking protocols such as Lido (stETH), Rocket Pool (rETH), and Coinbase (cbETH) issue a receipt token in exchange for your staked tokens. HMRC has not published specific guidance on whether depositing ETH to receive stETH constitutes a disposal of the ETH.
The exchange may be treated as a disposal in many jurisdictions, and HMRC's broader guidance on DeFi transfers suggests that where beneficial ownership passes to the protocol, a disposal may arise. Converting stETH to wstETH and similar wrapping events may also be treated as disposals depending on the facts and protocol structure. This area is fact-sensitive and a tax adviser familiar with HMRC's DeFi positions should be consulted for material balances.
When you ultimately sell or redeem liquid staking tokens, Section 104 pooling rules apply to the token held. The tax treatment of rebasing or liquid-staking reward mechanics should be reviewed case by case, as HMRC has not published direct liquid-staking guidance.
Airdrop Income - Different Analysis
Airdrops are treated differently from staking rewards under HMRC's guidance. Whether an airdrop is taxable at receipt depends on whether it was received in expectation of services, as part of a trade, or for no consideration. The analysis is fact-sensitive, and HMRC has not issued blanket guidance treating all airdrops as taxable income at receipt. Seek advice if airdrop amounts are material to your tax position.
Self Assessment Reporting
For most individual stakers where the activity is not a trade:
- Income: report total staking rewards as miscellaneous income on SA100. If total miscellaneous income from all sources is between £1,000 and £2,500, contact HMRC; if over £2,500, register for and file Self Assessment.
- Capital gains: report disposals of staked tokens on SA108 Capital Gains Summary (Cryptoassets section) if your total proceeds exceed £50,000 or your net gains exceed the £3,000 Annual Exempt Amount for 2025-26.
- 2025-26 deadlines: notify HMRC by 5 October 2026, file online and pay by 31 January 2027.
The £50,000 proceeds reporting threshold applies to those already registered for Self Assessment. If you are not yet registered, the main trigger is whether gains exceed the Annual Exempt Amount or you have other income requiring a return.
Records You Need to Keep
HMRC's record-keeping guidance for cryptoassets requires:
- Date and quantity of each staking reward received
- Sterling value at receipt, with evidence of the pricing source used
- Cumulative Section 104 pool balance after each reward is added
- Date, quantity, and sterling proceeds of each disposal of staked tokens
- Evidence of any same-day or 30-day matching that affects a disposal
Keep records for at least five years after the Self Assessment filing deadline for the relevant tax year.