HMRC treats them as income first — and CGT second. Here is the two-step rule, with numbers.
Staking rewards are usually miscellaneous income in the UK, taxed at 20%, 40% or 45% when you receive them — not when you sell.
Example: £1,800 of rewards at 20% = £360 income tax. Sell those tokens later for £2,400 and the £600 gain sits inside the £3,000 annual exempt amount.
Step 1: income tax on the sterling value at receipt. Step 2: CGT only on the rise since receipt. Never tax the full sale price twice.
Rewards enter your pooled average cost at their receipt value. Example: 10 ETH at £2,000 plus 1 reward ETH at £250 = 11 ETH costing £2,250.
Total trading and miscellaneous income of £1,000 or less may be covered — per person, not per platform. It does not wipe out a later capital gain.
The US waits for control of the rewards. HMRC taxes value at receipt — so locked rewards are a grey area here. Get advice, do not import the US answer.
Miscellaneous vs trade, the filing deadlines, the five costly mistakes, and FAQs — all with worked numbers.
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