UK NFT Tax Guide 2025

HMRC Treatment of NFTs

HMRC treats NFTs as cryptoassets subject to Capital Gains Tax:

"NFTs are cryptoassets and the tax treatment follows the same principles as other cryptoassets." - HMRC Cryptoassets Manual

Taxable Events

• Selling NFT: CGT on gain/loss
• Trading NFTs: Disposing of one for another = CGT
• Using crypto to buy NFT: CGT on crypto disposal
• Receiving NFT airdrop: Income tax
• Earning creator royalties: Income tax

Capital Gains Tax

Calculation

Capital Gain = Proceeds - Allowable Costs - £3,000 Allowance

Allowable costs include:

• Purchase price
• Gas fees (acquisition and disposal)
• Marketplace fees

CGT Rates (2024/25)

• Basic rate taxpayers: 10%
• Higher/additional rate: 20%
• Annual exemption: £3,000

Example

• Buy NFT: £1,000 (+ £50 gas)
• Sell NFT: £5,000 (- £100 fees)
• Allowable costs: £1,050
• Proceeds: £4,900
• Gain: £3,850
• After £3,000 allowance: £850 taxable
• Tax (20% rate): £170

Section 104 Pooling

For identical NFTs (same collection, same traits):

• Pool all identical NFTs together
• Calculate average cost
• Use pooled cost for disposals

Same-Day and 30-Day Rules

Special matching rules apply:

1. Same-day: Acquisitions and disposals on same day matched first
2. 30-day (bed and breakfast): Acquisitions within 30 days after disposal matched next
3. Section 104 pool: All other acquisitions

Minting NFTs

Casual creator:

• Minting = not taxable
• Cost = minting fees + gas
• Selling = CGT

Trading as NFT artist:

• Sales = income tax (trading income)
• Can deduct business expenses
• National Insurance applies

NFT Royalties

Creator royalties = income tax:

• Report on Self Assessment as "Other income"
• Taxed at marginal rate (20%, 40%, 45%)
• May be subject to National Insurance if trading

NFT Airdrops

Receiving NFT airdrops = income tax:

• Income = FMV in GBP when received
• Report on SA100 as "Other income"
• Cost basis for CGT = income amount

How to Report on Self Assessment

Capital Gains (SA108)

1. Complete SA108 Capital Gains pages
2. List each NFT disposal
3. Calculate total gains
4. Deduct £3,000 annual exemption
5. Calculate tax at 10% or 20%

Income (SA100)

For airdrops and royalties:

• SA100 Page 3, Box 17 - "Other taxable income"
• Description: "NFT Airdrops" or "NFT Royalties"

Record Keeping

Keep records for 5 years:

• Date and time of transactions
• NFT details (collection, ID)
• GBP value at transaction
• Gas fees and marketplace fees
• Transaction hashes

Tools

• Koinly - Section 104 pooling
• CoinTracker - NFT tracking

Common Mistakes

1. Not reporting NFT sales: HMRC requires CGT reporting
2. Forgetting gas fees: Gas fees are allowable costs
3. Wrong matching rules: Must apply same-day and 30-day rules
4. Not using £3,000 allowance: First £3,000 of gains tax-free
5. Treating royalties as capital gains: Royalties = income

FAQs

Are NFTs taxed differently than crypto?

No. Both are cryptoassets subject to CGT under same rules.

Do I get the £3,000 CGT allowance for NFTs?

Yes. The £3,000 annual exemption applies to all capital gains (crypto, NFTs, stocks, etc.) combined.

Can I offset NFT losses against gains?

Yes. NFT losses offset crypto gains and other capital gains.

What about bed and breakfasting?

The 30-day bed and breakfast rule applies to NFTs. Selling and repurchasing within 30 days uses new purchase price as cost basis.

HMRC Resources

• HMRC Cryptoassets Manual