Last updated on 7 August 2026
Crypto-to-Crypto Trades in the UK: CGT Triggers You’re Probably Missing
In the UK, every crypto-to-crypto trade, like swapping BTC for ETH, can trigger Capital Gains Tax (CGT). Many people think they only owe tax when they cash out to pounds. That’s wrong. HMRC treats crypto-to-crypto swaps as disposals.
So if you swap Bitcoin for Ethereum, or trade into a DeFi token like a Uniswap LP token, you may have to pay tax on any gain you made in GBP at that moment.
Why This Matters?
Most people trading crypto don’t keep track. They swap tokens daily or use yield farming, thinking tax only comes when they move to fiat. But the UK rules are clear: every swap counts. If you don’t track the GBP value when you swap, you might underreport or overpay later.
This guide explains how crypto-to-crypto trades trigger CGT. I’ll show you how to work out your gain in GBP with simple steps and examples.
The HMRC Position
HMRC’s manual (CRYPTO22100) says swapping one crypto for another is a disposal for CGT. That means:
- You ‘dispose’ of the first token.
- You ‘acquire’ the new token.
So, you must calculate how much GBP gain or loss you made on the old token. Even if you don’t get pounds in your bank, you must report the gain as if you did.
How Does It Work?
Think of it like this. If you bought 1 BTC for £10,000, and now that 1 BTC is worth £30,000, then swap it for ETH, your gain is £20,000. You must pay tax on that gain, even though you still hold crypto.
If you don’t keep records, you might lose track of these gains. And if HMRC asks, you need to show them your working.
Example: Simple BTC to ETH Swap
Let’s say you:
- Buy 1 BTC for £10,000 in Jan 2022.
- In March 2025, that BTC is worth £30,000.
- You swap all of it for ETH.
Your disposal is the full BTC. The GBP value is £30,000.
So, gain is £30,000 minus £10,000 = £20,000.
You now have new ETH worth £30,000 for your new pool.
When you later sell that ETH or swap it again, you repeat the process. You use £30,000 as the cost basis.
Example: Using Uniswap LP Tokens
DeFi makes it more complex. Imagine you add ETH and USDC to a liquidity pool. You get LP tokens in return. HMRC also sees that as a disposal.
You must calculate:
- The GBP value of the ETH and USDC you ‘disposed of.’
- The GBP cost of the new LP tokens you ‘acquired.’
This means DeFi users often have hundreds of tiny CGT disposals. Not recording these can cause huge problems.
How to Calculate GBP Gains?
Here’s how you do it:
- Find the GBP cost basis. What did you pay for the crypto you’re disposing of? Use the average cost if you bought at different times (the ‘pooling rules’).
- Work out the GBP value at the time of disposal. Use a reliable crypto price source or your exchange record.
- Calculate gain or loss. Disposal value minus cost basis.
- Record the new cost basis for the new crypto. This is your new acquisition cost in GBP.
Example:
- Buy 2 ETH at £1,000 each (£2,000 total).
- ETH price rises. Now worth £3,000 each (£6,000 total).
- You swap 2 ETH for BTC.
Disposal proceeds: £6,000.
Cost basis: £2,000.
Gain: £4,000.
Your BTC’s acquisition cost is now £6,000. Keep that record for when you sell the BTC later.
Why Most People Get It Wrong?
Some people only track fiat movements. Others use exchanges that don’t give GBP values. If you trade on DEXs like Uniswap, it’s even harder. You need to convert each swap to GBP using that day’s spot rate.
Tools like CoinTracking or Koinly can help, but you still need to check they use correct GBP rates. And yes, you need to set up an account on Koinly if you don’t already have one.
Real Consequences
In 2022, HMRC said they were targeting DeFi users and crypto swappers. In 2024, they got new data from exchanges. Many people will get letters asking them to prove their gains. If your records are poor, you risk penalties. Worst case, they can open an enquiry back several years.
Good Record-Keeping
Keep these details for each swap:
- Date and time.
- Crypto amount disposed.
- GBP value at disposal.
- Cost basis in GBP.
- GBP value of new crypto acquired.
- Transaction fees.
Save exchange statements, wallet addresses, and screenshots if needed.
What If I Made a Loss?
Not every swap is a gain. If you make a loss, you can use it to reduce other crypto gains that year. But you must claim it. If you don’t record it properly, you lose that chance.
Final Thoughts
Crypto-to-crypto trades can look harmless. But each swap is a taxable event in the UK. If you ignore this, you could owe more tax than you think. Or worse, you might pay too much because you missed your losses. Take time to keep clear records, convert everything to GBP at the right time, and get help if you need it.
If you’re not sure, speak to a crypto tax specialist. Mistakes can be expensive.
Need Help With Your Crypto Tax?
It’s easy to make mistakes with crypto swaps. We can help you stay compliant and save tax. Talk to a crypto tax expert today at Crypto Accountants.
FAQs
Do I pay CGT every time I swap crypto for another crypto?
Yes. In the UK, every crypto-to-crypto swap counts as a disposal. You must work out the gain or loss in GBP at the time you swap.
How do I find the GBP value when I swap on Uniswap or other DEXs?
Use the spot price for GBP on that day. You can check CoinMarketCap, CoinGecko, or your exchange. Keep a copy for your records.
What happens if I don’t report crypto-to-crypto swaps?
HMRC can fine you or charge interest for unpaid tax. They can also open an enquiry if they suspect you underreported gains.
