CryptoTax UK · Guide
Do I pay tax when I swap crypto in the UK?
Many UK crypto investors are surprised to learn that swapping Bitcoin for Ethereum — or any crypto-to-crypto trade — is treated as a taxable disposal by HMRC. This page explains why, and how to calculate the gain. Educational only — not tax advice.
Calculate my swap gains →Why a swap counts as a disposal
HMRC treats each crypto you hold as a separate chargeable asset. When you exchange one crypto for another, you are deemed to have disposed of the first asset at its GBP market value on the trade date. It doesn't matter that no GBP changes hands — the disposal is valued in GBP at the moment of the swap.
Worked example: swapping BTC for ETH
You bought 1 BTC for £20,000. You later swap it for ETH when BTC is worth £40,000. HMRC treats this as a disposal of BTC at £40,000 — so your gain is £20,000. You also acquire ETH at a cost basis of £40,000 (its GBP value at the time of the swap). That cost basis carries forward into your ETH Section 104 pool.
How the gain is calculated
Gain = disposal proceeds (GBP value of crypto given up at swap date) minus allowable cost (from your Section 104 pool). The same-day and 30-day bed-and-breakfast rules may also apply if you re-acquire the same asset shortly before or after. The net gain after losses and the £3,000 annual allowance is what gets taxed.
DeFi swaps and automated market makers
Swaps on decentralised exchanges (Uniswap, Curve, etc.) are treated the same way as centralised exchange trades. Each swap is a disposal of the token sent and an acquisition of the token received, both at their GBP value at the moment of the transaction. Gas fees may be deductible as an incidental cost of disposal.
How to report swaps on Self Assessment
Each swap contributes to your total disposal proceeds and allowable costs for the SA108 Cryptoassets section. You don't report each swap individually on the form — you report the aggregate totals across all disposals for the year. But you need records of every swap to calculate those totals correctly.
Frequently asked questions
Is a stablecoin swap also taxable?
Yes. Swapping BTC or ETH for USDC or USDT is a disposal of the original asset at its GBP value on the swap date. Stablecoins are not exempt from CGT.
What if the swap results in a loss?
A loss on a swap may be offset against gains in the same tax year or carried forward to future years, provided you claim it on your Self Assessment. Keep records of the swap to support the loss claim.
Do I owe tax if I swap crypto but the overall position is a loss?
Not necessarily. If total net losses exceed total net gains in a year, there is no CGT to pay — but you should still file if your disposal proceeds exceeded £50,000 or if you want to formally claim the losses.
Can I use the annual CGT allowance against swap gains?
Yes. The £3,000 annual exempt amount applies to your total net gains across all chargeable assets including crypto swaps. Only gains above £3,000 are taxed.
More UK crypto-tax guides
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.