CryptoTax UK · Guide
Ethereum tax in the UK — everything ETH holders need to know
Ethereum is the most used blockchain for DeFi, NFTs and staking — and it generates some of the most complex crypto tax situations for UK investors. This page covers CGT on ETH disposals, Income Tax on staking, gas fee deductions, and post-Merge rules. Educational only — not tax advice.
Calculate my ETH tax →CGT on selling or swapping ETH
Selling ETH for GBP, swapping ETH for another crypto (including stablecoins), spending ETH on goods or services, and gifting ETH are all disposals for UK CGT purposes. The gain is calculated using your Section 104 pool average cost. For swaps, the proceeds are the GBP value of the crypto received at the time of the swap.
ETH staking rewards — Income Tax
Staking rewards received in ETH are typically subject to Income Tax as miscellaneous income at their GBP value on the date of receipt. The staked tokens themselves may or may not constitute a disposal depending on the staking arrangement — see HMRC's DeFi guidance for liquid staking (e.g. Lido stETH).
Are gas fees tax deductible?
Gas fees paid to execute a disposal (e.g. selling ETH or swapping tokens) may be deductible as incidental costs of disposal, reducing your gain. Gas fees paid to acquire an asset may increase its cost basis. Gas fees for non-disposal transactions (wallet transfers, approvals) are generally not deductible. Keep records of all gas fees paid.
The Ethereum Merge and ETH2
The Ethereum Merge (September 2022) converted the chain from Proof of Work to Proof of Stake. HMRC has not published specific guidance on the Merge, but most tax practitioners treat it as a continuation of the same asset — not a disposal. ETH held before and after the Merge is generally treated as the same token in your Section 104 pool.
Frequently asked questions
Does the stETH/Lido staking contract trigger a disposal?
Depositing ETH into Lido and receiving stETH (a derivative token) may be treated as a disposal of ETH and acquisition of stETH, since they are technically different tokens. Most practitioners treat this as a disposal at market value. HMRC has not published definitive guidance — consider specialist advice for significant staking positions.
How do I value ETH received as a staking reward?
Use the GBP value of ETH at the time each staking reward was received. Block explorer data (e.g. Etherscan) combined with historical ETH price data can provide the GBP price at each specific reward timestamp.
I sent ETH between my own wallets — is that taxable?
No — transferring ETH between wallets you own is not a disposal. It does not affect your Section 104 pool.
Can I deduct hardware wallet costs?
Generally no — hardware wallet costs are typically a personal capital expenditure and not deductible against either Income Tax or CGT.
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.