CryptoTax UK · Guide
How to Calculate Cost Basis for Crypto UK
Getting your cost basis right is the foundation of an accurate UK crypto tax return. This guide explains how HMRC's Section 104 pool and matching rules determine your allowable cost for each disposal. Educational only — not tax advice.
Calculate using Section 104 rules →What is cost basis?
Your cost basis (HMRC calls it 'allowable cost') is what you paid for your crypto, including any transaction fees attributable to the acquisition. It is deducted from your disposal proceeds to calculate your gain or loss.
The Section 104 pool
HMRC requires UK individuals to pool all acquisitions of the same asset into a Section 104 pool. The pool tracks the total quantity held and the total cost. Each new purchase adds to the pool; each disposal draws from it at the current weighted average cost per unit.
The matching rules — applied before the pool
Before drawing from the Section 104 pool, HMRC requires two matching rules to be applied first: (1) Same-day rule: if you buy and sell the same asset on the same day, match those quantities first. (2) 30-day rule: if you sell an asset and buy it back within 30 days, match the disposal with the buy-back cost.
Fees and their treatment
Acquisition fees can be added to the cost basis, increasing the acquisition cost in the pool. Disposal fees can be deducted from the proceeds, reducing the gain. Both reduce your overall CGT liability.
Frequently asked questions
Can I use specific identification or FIFO for UK crypto?
No — HMRC does not allow specific identification or FIFO for crypto. You must use the Section 104 pooling method (with same-day and 30-day matching applied first).
What if I bought the same crypto on multiple exchanges?
All acquisitions of the same asset — regardless of which exchange you used — go into a single Section 104 pool for that asset. There is one pool per asset, not one per exchange.
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Calculate using Section 104 rules →Educational guidance only. CryptoTax UK is not a regulated tax adviser and the information above does not constitute tax, legal or financial advice. Always confirm your specific position with HMRC or a qualified accountant before filing.