Coinbase Tax Guide UK 2025

What is Coinbase?

Coinbase is the UK's most popular cryptocurrency exchange, offering a regulated platform for buying, selling, and storing digital assets. Coinbase is registered with the Financial Conduct Authority (FCA) as a crypto asset business.

Coinbase products available in the UK:

• Coinbase Exchange: Buy, sell, and trade crypto with GBP
• Advanced Trade: Lower-fee professional trading
• Coinbase Earn: Learn about crypto and earn rewards
• Coinbase Staking: Stake ETH, SOL, ADA, and other proof-of-stake coins
• Coinbase Card: Visa debit card with crypto rewards (available in UK)
• Convert Feature: Instant crypto-to-crypto swaps

HMRC Tax Treatment of Coinbase Transactions

HMRC published comprehensive guidance in its Cryptoassets Manual (CRYPTO20000+). The key principle: cryptocurrency is treated as property/assets, not currency.

Taxable Events on Coinbase

Capital Gains Tax Events (Disposals)

• Selling crypto for GBP: BTC → GBP = disposal subject to CGT
• Trading crypto-to-crypto: ETH → SOL = disposal of ETH
• Using Convert feature: BTC → USDC = taxable disposal
• Spending with Coinbase Card: Crypto → goods = disposal
• Gifting crypto: May be disposal at market value

Income Tax Events

• Coinbase Earn rewards: Miscellaneous income when received
• Staking rewards: Miscellaneous income at FMV on receipt
• Coinbase Card rewards: Miscellaneous income (not like cashback)
• Referral bonuses: Miscellaneous income
• Airdrops: May be income if from employment or trade

Non-Taxable Events

• Buying crypto with GBP: Acquisition, no tax until disposal
• Transferring between your own wallets: Not a disposal
• HODLing: No tax while holding

Capital Gains Tax (CGT) on Coinbase

How CGT Works

When you dispose of cryptocurrency on Coinbase:

• Calculate gain/loss: Disposal proceeds - Allowable costs (cost basis + fees)
• Apply Section 104 pooling: Average cost basis for fungible tokens
• Deduct annual allowance: £3,000 (2024/25)
• Pay CGT on remainder: 10% (basic rate) or 20% (higher rate)

CGT Rates (2024/25)

Annual CGT Allowance

• 2024/25: £3,000
• 2023/24: £6,000
• 2022/23: £12,300

The allowance has been significantly reduced in recent years, making crypto tax planning more important.

Section 104 Pooling

HMRC requires Section 104 pooling (also called share pooling) for fungible tokens. This means:

• All units of the same cryptocurrency form a single "pool"
• Cost basis = average cost of all acquisitions
• When you dispose, you use the pooled average cost

Example of Section 104 Pooling

Transactions:

• Jan 1: Buy 1 BTC @ £30,000
• Feb 1: Buy 1 BTC @ £34,000
• Mar 1: Sell 1 BTC @ £40,000

Calculation:

• Pool: 2 BTC for £64,000 = £32,000 average cost per BTC
• Disposal: 1 BTC sold @ £40,000
• Cost basis: £32,000
• Capital gain: £40,000 - £32,000 = £8,000
• Remaining pool: 1 BTC @ £32,000

Same Day and Bed & Breakfasting Rules

HMRC has special ordering rules that override Section 104 pooling:

1. Same Day Rule

Disposals are matched with acquisitions on the same day first, using actual cost.

2. Bed & Breakfasting Rule (30-day rule)

Disposals are matched with acquisitions within the next 30 days, in chronological order.

3. Section 104 Pool

Only after applying same day and 30-day rules, use the Section 104 pooled cost.

These rules prevent tax avoidance through strategic buying/selling.

Income Tax on Coinbase Rewards

When Coinbase Rewards Are Taxable

HMRC treats crypto rewards as miscellaneous income when:

• You receive the rewards (not when you sell)
• You have dominion and control over the tokens
• The rewards are not capital in nature

Types of Taxable Coinbase Income

1. Coinbase Earn Rewards

• Tax treatment: Miscellaneous income
• Valuation: GBP value at time of receipt
• Cost basis: Income amount (for future CGT on disposal)

2. Staking Rewards

• Tax treatment: Miscellaneous income
• Frequency: Each reward receipt is a separate income event
• Example: Stake 10 ETH, receive 0.4 ETH/year @ £2,500/ETH = £1,000 income

3. Coinbase Card Rewards

• Tax treatment: Miscellaneous income (unlike traditional cashback)
• Reasoning: Crypto has value, unlike reward points
• Example: Spend £1,000, get £40 in BTC = £40 income

4. Referral Bonuses

• Tax treatment: Miscellaneous income
• Report on Self Assessment

Income Tax Rates (2024/25)

How to Download Coinbase Transaction History

Method 1: Tax Reports

1. Log in to Coinbase.com
2. Profile → Documents
3. Select Tax Documents
4. Click Generate Report
5. Select tax year (April 6 - April 5 for UK)
6. Download CSV

Note: Coinbase uses US tax year (Jan-Dec) by default. You may need to generate two reports (previous and current calendar year) to cover the UK tax year.

Method 2: Transaction History

1. Coinbase.com → Profile → Statements
2. Generate Statement for custom date range
3. Select CSV format
4. Download

Method 3: API Integration (Best for Tax Software)

1. Coinbase.com → Settings → API
2. Create API key (read-only)
3. Connect to UK crypto tax software like Koinly
4. Automatic transaction sync

Understanding Coinbase Transaction Types

*Transfers between your own wallets are not taxable. Gifts or payments may be disposals.

Coinbase-Specific Tax Scenarios

1. Using Coinbase Convert

Scenario: You convert 1 ETH to 1,500 USDC when ETH = £2,500.

• Original ETH cost basis (pooled): £1,800
• Disposal proceeds: £2,500
• Capital gain: £700
• New USDC cost basis: £2,500

2. Coinbase Staking (ETH)

Scenario: You stake 10 ETH and receive 0.4 ETH in rewards throughout the tax year.

• Average ETH price when received: £2,500
• Income: 0.4 × £2,500 = £1,000
• Report £1,000 on SA103 (Other UK Income)
• Cost basis for 0.4 ETH: £1,000 (add to Section 104 pool)

3. Coinbase Card Spending

Scenario: You spend £500 using your Coinbase Card funded with BTC, and earn £20 in BTC rewards.

• Disposal: BTC worth £500 spent (calculate CGT)
• Income: £20 in BTC rewards (miscellaneous income)
• Report disposal on SA108, income on SA103

4. Coinbase Earn

Scenario: Complete Coinbase Earn lessons and receive:

• £5 in COMP
• £3 in GRT
• £4 in FORTH

Tax treatment:

• Total income: £12
• Report on SA103
• Cost basis for each token = income amount

How to Report Coinbase Taxes on Self Assessment

When You Need to File Self Assessment

You must file Self Assessment if:

• Total gains before deducting allowances exceed £50,000 (4× annual allowance)
• Net gains after deducting allowances and losses exceed £3,000
• You have crypto income from staking, Coinbase Earn, etc.
• You're self-employed or have other untaxed income

SA108: Capital Gains Summary

Report Coinbase disposals on SA108:

1. Box 3: Number of disposals (can use summary statement if many transactions)
2. Box 4: Total disposal proceeds
3. Box 5: Total allowable costs (including fees)
4. Box 6: Total gains
5. Box 7: Total losses
6. Box 8: Total gains after losses
7. Box 9: Deduct annual allowance (£3,000)
8. Result: Taxable gains

SA103: Self Employment (for Income)

Report Coinbase rewards income on SA103:

• Box 20 (Other UK income): Total crypto income from Coinbase Earn, staking, Card rewards
• Description: "Cryptocurrency rewards - Coinbase"

Supporting Documentation

HMRC may request:

• Transaction history from Coinbase
• Section 104 pool calculations
• Cost basis records
• Crypto tax software reports

Using Crypto Tax Software for Coinbase

Why Use Tax Software?

• Automatic Section 104 pooling: Complex to calculate manually
• Same day/30-day rules: Software applies HMRC ordering rules
• Multiple exchanges: Consolidate Coinbase with other platforms
• Error reduction: Minimize calculation mistakes
• Self Assessment ready: Generate SA108-ready reports

Best UK Crypto Tax Software for Coinbase

1. Koinly

• UK-specific features: Section 104 pooling, same-day rule, HMRC-compliant reports
• Coinbase integration: API sync or CSV import
• Pricing: From £49/year
• Read full Koinly review

2. CoinTracker

• Strengths: Excellent Coinbase integration (co-founder is ex-Coinbase)
• UK support: Section 104 pooling available
• Pricing: From £59/year

3. Recap

• UK-focused: Built specifically for UK tax rules
• Free tier: Up to 100 transactions
• Best for: UK-only crypto investors

Example Tax Calculations

Example 1: Simple Coinbase User

Activity in 2024/25 tax year:

• April: Buy £5,000 of BTC @ £40,000/BTC (0.125 BTC)
• September: Sell 0.125 BTC @ £50,000/BTC for £6,250
• Coinbase fees: £50 (purchase) + £60 (sale)

CGT calculation:

• Disposal proceeds: £6,250 - £60 = £6,190
• Allowable costs: £5,000 + £50 = £5,050
• Capital gain: £6,190 - £5,050 = £1,140
• Less annual allowance: £1,140 - £3,000 = £0
• Tax owed: £0 (gain under allowance)

Example 2: Coinbase Earn + Staking

Activity:

• Coinbase Earn: £50 in various tokens
• ETH staking: 0.4 ETH received @ £2,500 = £1,000
• No disposals (just holding)

Income tax calculation:

• Total crypto income: £50 + £1,000 = £1,050
• Assuming basic rate taxpayer: £1,050 × 20% = £210 tax owed
• Report on SA103

CGT: None (no disposals)

Example 3: Active Trader

Activity:

• 100 trades on Coinbase throughout tax year
• Total disposal proceeds: £100,000
• Total allowable costs: £85,000
• Total capital gains: £15,000
• Staking income: £800

CGT calculation (higher rate taxpayer):

• Total gains: £15,000
• Less annual allowance: £15,000 - £3,000 = £12,000
• CGT @ 20%: £12,000 × 20% = £2,400

Income tax:

• £800 × 40% (higher rate) = £320

Total tax: £2,400 + £320 = £2,720

Common Mistakes to Avoid

1. Not using Section 104 pooling: HMRC requires this method, not FIFO
2. Forgetting same-day/30-day rules: These override pooling
3. Not reporting Coinbase Earn: All rewards are income, even small amounts
4. Treating Card rewards like cashback: Crypto rewards are taxable income
5. Using wrong tax year: UK tax year is April 6 - April 5, not Jan-Dec
6. Not keeping records: Must keep for 6 years
7. Ignoring Convert trades: Conversions are disposals
8. Not deducting fees: Trading fees reduce gains
9. Missing the £3,000 allowance: Use it or lose it (can't carry forward)
10. Not reporting when under allowance: Must report if total gains > 4× allowance (£12,000)

Record Keeping Requirements

What to Keep

HMRC requires records for 6 years after the tax year end:

• All Coinbase transaction history
• Section 104 pool calculations
• Cost basis records for all acquisitions
• Records of transfers to/from external wallets
• Wallet addresses and transaction IDs
• Screenshots or confirmations

How to Keep Records

• Crypto tax software: Automatically maintains records
• CSV exports: Download annually and store securely
• Backup: Keep multiple copies (cloud + local)

FAQs

Do I need to report Coinbase if I only bought and held?

No. Buying and holding is not a taxable event. You only need to report when you dispose (sell, trade, spend) or receive income (staking, Coinbase Earn).

What if my gains are under £3,000?

You still may need to report if your total disposal proceeds exceed £50,000 (4× the annual allowance). But you won't owe CGT if gains are under £3,000.

Are Coinbase fees deductible?

Yes:

• Purchase fees: Added to cost basis (reduce future gains)
• Sale fees: Deducted from proceeds (reduce gains)

How do I calculate Section 104 pool manually?

Manual calculation is complex. Use crypto tax software like Koinly which automatically maintains Section 104 pools for all your cryptocurrencies.

What about Coinbase Pro / Advanced Trade?

Same tax rules apply. Some tax software requires separate API connection for Coinbase Pro (legacy platform) vs. main Coinbase account.

Is Coinbase Card spending taxable?

Yes. Each purchase is a disposal of crypto:

• Calculate CGT on the crypto spent
• Report card rewards as miscellaneous income

Do I pay income tax AND capital gains tax on staking?

You pay both, but not on the same amount:

• Income tax: When you receive rewards (£1,000 received = £1,000 income)
• CGT: When you sell the rewards (cost basis = £1,000, so only appreciation is taxed)

What if I transferred crypto from Binance to Coinbase?

This is not a disposal, but you need to track cost basis:

• Transfer from Binance = removal from Binance pool
• Transfer to Coinbase = addition to Coinbase pool
• Cost basis = original purchase price on Binance
• Use tax software to track across exchanges

Can I offset Coinbase losses against gains?

Yes. Capital losses from Coinbase can offset capital gains from any source (stocks, property, other exchanges). Unused losses can be carried forward indefinitely.

When to Seek Professional Help

Consider consulting a UK crypto tax accountant if:

• Annual gains exceed £20,000
• You have complex DeFi activities
• You're trading as a business (may be subject to Income Tax instead of CGT)
• You have crypto across multiple exchanges and wallets
• You received large airdrops or NFT income
• You're unsure about any transaction classification

Tools & Resources

Recommended Crypto Tax Software

• Koinly - Best overall for UK, excellent Coinbase integration
• Recap - UK-focused, free tier available
• Accointing - Good for multiple exchanges

HMRC Resources

• HMRC Cryptoassets Manual
• Capital Gains Tax guidance
• Self Assessment information

Coinbase UK Resources

• Coinbase UK Tax Guide
• Coinbase Tax Documents

Final Thoughts

Reporting Coinbase transactions to HMRC requires careful attention to Section 104 pooling, same-day rules, and the distinction between income and capital gains. With the CGT allowance now at just £3,000, even modest crypto activity can trigger tax obligations.

Key takeaways:

• Use crypto tax software to handle Section 104 pooling automatically
• Track all rewards (Coinbase Earn, staking, Card) as income
• Remember the 30-day rule when calculating cost basis
• Keep records for 6 years
• File Self Assessment if gains exceed £3,000 or proceeds exceed £50,000

Most UK Coinbase users with straightforward activity can manage their taxes using software like Koinly. Those with complex situations should consult a crypto-specialist accountant to ensure compliance with HMRC rules.