Section 104 Pooling And The Crypto 30-Day Rule in the UK

What Is The Crypto 30-Day Rule?

The crypto 30-day rule, also called the bed and breakfasting rule, matches any tokens you buy within 30 days after a disposal against that disposal, using the new purchase price instead of your Section 104 pool cost. It stops you selling at a loss and rebuying straight away just to bank a tax deduction.

HMRC applies three matching rules in a fixed order, and getting that order wrong changes your tax bill by thousands on a single disposal.

Pooling mistakes used to go unnoticed. They don’t anymore. Under the Cryptoasset Reporting Framework, UK exchanges began collecting user data on 1 January 2026 and will report it to HMRC from 2027. HMRC will hold your transaction history whether or not your return matches it.

At Crypto Accountants, most of the corrections we make come down to the same thing: the matching rules applied in the wrong order, or not applied at all.

Our team reconstructs the pool, applies the same-day and 30-day rules correctly, and produces a calculation you can put in front of HMRC and defend.

If you are not sure your pooling is right, call us on 0208 638 5800. We are happy to take a look.

The Three Matching Rules, In Order!

When you dispose of crypto, HMRC does not simply take your average cost. It works through three rules in a fixed sequence, and each one only applies to whatever the rule above it has not already matched.

Rule 1: The Same-Day Rule

HMRC matches any tokens of the same type you acquired on the day of the disposal first, at what you paid that day. Your pool plays no part until that match settles.

HMRC treats all same-day acquisitions as a single purchase. Buy three times on the day you sell, and those three buys merge into one average before HMRC matches anything.

Additionally, this rule catches day traders constantly. Sell 2 BTC in the morning, buy 2 BTC back in the afternoon, and you realise almost no gain, whatever your pool cost says. HMRC matches the morning sale against the afternoon purchase.

Rule 2: The Crypto 30-Day Rule

Next, tokens bought in the 30 days after the disposal are matched, taking the earliest purchase first.

Note the direction, because this is where most people go wrong. The window looks forward from the disposal, not backward. Moreover, a purchase made two days before you sold stays in the pool and plays no part in the matching.

The 30 days are calendar days, not working days, and the count starts the day after the disposal.

This is the bed and breakfasting rule, and its purpose is narrow. It exists to stop you from selling at a loss, claiming the relief, and buying the same asset straight back. If you rebuy inside the window, the loss is matched against the rebuy instead of the pool, and the relief you were expecting largely disappears.

Rule 3: The Section 104 Pool

Whatever the first two rules have not matched comes out of the Section 104 pool, at the pooled average cost.

For most investors, this is the bulk of the disposal, and for anyone who does not trade around their sales, it is the whole of it. If you sell and do not rebuy within 30 days, the pool is the only rule that applies.

Each token type gets its own Section 104 pool. Your ETH pool and your BTC pool are entirely separate, and a purchase of one never affects the other.

Moreover, the same applies to the matching rules. Buying ETH the day after you sold BTC triggers nothing, because the rules only ever match a disposal against acquisitions of the identical token.

How Share Pooling Works For UK Crypto?

Section 104 pooling, sometimes called share pooling for crypto in the UK, treats all your holdings of a single token as one asset with one blended cost. The rules come from HMRC’s Cryptoassets Manual, which sets out how pooling and the matching rules apply to individuals. 

You never track individual coins, and you never use FIFO or LIFO for the pooled portion.

Moreover, allowable costs that go into the pool include the purchase price, exchange fees, and transaction fees paid to acquire the tokens.

A Worked Crypto Capital Gains Calculation

Let us share a full crypto capital gains calculation with UK figures, covering all three matching rules in one disposal.

Sarah’s ETH transactions, 2025/26 tax year:

Step 1: Build The Pool Before The Sale

Add both purchases together. That gives Sarah 30 ETH at a total cost of £65,325, which works out to an average of £2,177.50 per ETH.

Step 2: Work Out The Proceeds Per Token

She received £45,000 and paid a £225 fee, leaving £44,775. Divided across 15 ETH, that is £2,985 per ETH disposed of.

Step 3: Apply The Same-Day Rule

Sarah bought 5 ETH on 14 January, the same day she sold. Those 5 are matched first, at what she paid that day.

Proceeds of £14,925 against a cost of £14,575 gives a gain of £350.

Step 4: Apply The Crypto 30-Day Rule

She bought 5 more ETH on 28 January, 14 days after the disposal and comfortably inside the window. Those 5 are matched next.

Proceeds of £14,925 against a cost of £13,820 give a gain of £1,105.

Step 5: Match The Remainder To The Pool

That leaves 5 ETH, which come out of the Section 104 pool at £2,177.50 each, a cost of £10,887.50.

Proceeds of £14,925 against that cost give a gain of £4,037.50.

Step 6: Add Up The Gain And The Tax

The three matches together produce a total gain of £5,492.50.

After the £3,000 annual exempt amount, £2,492.50 is taxable. At the 24% higher rate, Sarah owes £598.20 in CGT.

Step 7: Update The Pool

Only 5 ETH came out of the pool. The two January purchases were consumed by the matching rules, so they never entered it at all.

The pool now holds 25 ETH at £54,437.50, and the average cost per ETH is unchanged at £2,177.50.

What Happens If You Ignore The Matching Rules

If Sarah had simply used the pooled average for all 15 ETH, her cost would have been £32,662.50 and her gain £12,112.50. Taxable gain: £9,112.50. CGT at 24%: £2,187.

That is £1,588.80 of tax she did not owe on a single disposal. Most portfolio trackers get this right. Most spreadsheets do not.

Where People Get The Crypto 30-Day Rule Wrong

Using FIFO or LIFO out of habit. UK individuals do not identify crypto on a first-in, first-out basis. A lot of tracking software defaults to FIFO because it was built for US users, and the output looks plausible enough that nobody checks it.

Leave fees out of the pool. Exchange and transaction fees paid on acquisition form part of your allowable cost. Omit them, and you understate your cost, overstate every gain that follows, and pay tax you do not owe.

Treating wallet transfers as disposals. Moving tokens between wallets you control is not a disposal. It does not come out of the pool, and the network fee is not an allowable cost against anything.

Missing crypto-to-crypto swaps. Trading ETH for SOL is a disposal of ETH at its sterling market value on that date, even though no cash changed hands. Swaps are the single largest source of unreported gains we see.

Converting to GBP at the wrong point. Every leg needs its sterling value at the date and time of the transaction, not today’s rate and not the USD figure your exchange exported. Pools built on USD numbers are wrong from the first entry.

Assuming a rebought loss still counts. Sell at a loss, buy back 10 days later, and the loss is matched against the rebuy rather than the pool. The relief you were expecting largely disappears.

The matching rules themselves are only half the problem. Moreover, these are the errors we correct most often when we rebuild a client’s pool from scratch.

That last one is a common trigger for a correction letter. If you have already received an HMRC crypto nudge letter, mismatched pooling is often the reason the figures in HMRC’s exchange data do not agree with your return.

Final Thoughts!

Section 104 pooling is not difficult once you see it applied. Buy, add to the pool. Sell, take out a proportionate slice. The complication is the same-day and crypto 30-day rule sitting on top, deciding which costs get used before the pool is touched at all.

Get the order right, and your gain is accurate. But if you get it wrong, you either overpay or underpay and hear from HMRC later. Neither is a good outcome when the fix takes an afternoon.

Getting It Right Before HMRC Asks!

Pooling errors compound. One mismatched disposal changes your pool cost, which changes every gain you report after it. By the time HMRC opens an investigation into your crypto, you may be re-working three or four years of records at once.

The complexity rises sharply once staking, liquidity pools and lending enter the picture, where each deposit and withdrawal can be a disposal in its own right.

At Crypto Accountants, we rebuild pools from raw exchange and on-chain data, apply the matching rules in the correct order, and produce a calculation you can defend if HMRC asks for it. Led by Malik Ali, FCCA, our team handles this for investors, traders, and Web3 businesses every week.

If your pooling does not look right, call us on 0208 638 5800 or visit cryptoaccountants. live.

People Also Ask

What is a Section 104 pool in UK crypto tax?

A Section 104 pool is one running record of every token of the same type you hold, carrying a single blended cost. You keep a separate pool for each token, and its average cost is what you use for any disposal the same-day and 30-day rules have not already matched.

How do I calculate my crypto capital gains in the UK?

Deduct your allowable costs from your disposal proceeds, applying HMRC’s matching rules in order: same-day, then the following 30 days, then the Section 104 pool. Total your gains for the tax year, deduct losses and the annual exempt amount, then tax the balance at 18% or 24%.

Are gas fees deductible for UK crypto tax?

Yes, when paid wholly and exclusively to acquire or dispose of a token. Gas on a purchase adds to your cost; gas on a sale reduces your proceeds. Gas on transfers between wallets you own is not deductible, because no disposal takes place.