Staking, mining and airdrops — UK Income Tax explained
Quick answer: Mining rewards, staking income, airdrops received for a service, and salary paid in crypto are generally subject to Income Tax on their pound value when received. You add that value to your pool cost when you later sell.
Crypto you earn (rather than buy) is usually taxed as income when you receive it. The sterling value on that date matters.
Staking rewards
When you stake crypto and receive new tokens as a reward, HMRC generally treats the reward as income at the sterling market value when you receive it. That value becomes part of your acquisition cost for the pool when you later dispose.
Mining
Mining income is typically taxable as trading or miscellaneous income depending on whether your activity amounts to a trade. Electricity and equipment costs may be deductible if you are trading. Most hobby miners still need to declare income.
Airdrops
Airdrops received in return for a service (such as promoting a project) are usually income. Airdrops received without doing anything may still be taxable depending on the circumstances — see HMRC guidance on receiving cryptoassets. Minor miscellaneous income may fall within the £1,000 trading allowance.
The £1,000 trading allowance
If you are not carrying on a trade, mining, staking and lending income may count as miscellaneous income. The first £1,000 of trading and miscellaneous income per tax year may be covered by the trading allowance — but you must still keep records and report if you exceed it or must file for other reasons.
Frequently asked questions
Do I pay tax twice on staking rewards?+
You pay Income Tax when received. If you later sell at a profit above that value, CGT may apply on the additional gain.