Do I pay tax when I sell an NFT in the UK?

Yes. HMRC treats NFTs as crypto assets — a form of intangible capital property. When you dispose of an NFT (sell it, swap it for another NFT or cryptocurrency, or give it away at market value), a capital gains tax event arises. Your gain is the sale proceeds minus the acquisition cost (in GBP) minus allowable costs such as gas fees and platform commission. Gains above the £3,000 annual CGT exempt amount (2026/27) are taxed at 18% (basic rate) or 24% (higher/additional rate). If you create and sell NFTs as a business (trading stock), income tax applies instead.

How do I calculate the cost basis of an NFT bought with ETH?

When you buy an NFT with cryptocurrency (e.g. ETH), the cost basis is the sterling equivalent of the ETH at the time of purchase. HMRC requires you to use a 'reasonable' exchange rate — typically the closing mid-market rate on the day of the transaction. You should also note that spending ETH to buy an NFT is itself a disposal of ETH, which may trigger a separate CGT event on any ETH gain. Track both transactions separately. Approved cost basis methods under HMRC's crypto pooling rules apply to ETH holdings, not individual NFTs (each NFT is a unique asset with its own cost basis).

What is HMRC's pooling rule for NFTs?

HMRC's Section 104 pooling rule applies to fungible crypto assets (like Bitcoin or ETH) — where you hold multiple identical tokens and must average the acquisition cost. Individual NFTs are non-fungible by definition and are treated as unique assets. Each NFT has its own acquisition cost and disposal proceeds, calculated separately. However, if you create identical-looking NFTs in a series (e.g. a 10,000 piece generative PFP collection) HMRC might argue the individual tokens within the same contract address could be pooled — specialist advice is recommended for large-scale NFT projects.

What expenses can I deduct from my NFT gains?

Allowable deductions from NFT disposal proceeds include: the original purchase price (in GBP at date of acquisition), gas fees paid when minting or buying the NFT, marketplace platform fees (e.g. OpenSea, Blur commission) charged on the sale, costs of any professional valuation, and incidental costs of acquisition or disposal. You cannot deduct the cost of creating art digitally, your time, or general overhead — unless NFT creation is your trade. Gas fees on unrelated transactions (e.g. swapping ETH to fund the purchase) must be apportioned carefully and may not all be allowable.

What if I create and sell NFTs as an artist?

If you create NFTs as part of a trade (as a digital artist, musician or creator), the income is treated as self-employed trading income subject to income tax and National Insurance, not CGT. The profit is your sale proceeds minus allowable costs of creation (software, hardware apportioned for business use, marketplace fees). You must register for Self Assessment and file a return annually. Royalty income from secondary sales (resale royalties embedded in NFT smart contracts) is also trading income. If creation is casual and not systematic, HMRC might treat it as a capital transaction — but regular professional creators are almost always traders.

Do I need to report NFT losses to HMRC?

Yes, you should always report capital losses on your Self Assessment return even if you have no gains to offset them against. Capital losses can be carried forward indefinitely to offset future capital gains. Claims for losses must be made within 4 years of the end of the tax year in which the disposal occurred. If your total CGT proceeds in the year exceed four times the annual exempt amount (£12,000 for 2026/27), you must file a return even if total gains are below the £3,000 exempt amount. If an NFT becomes worthless (rug pull, project abandoned), you may be able to make a negligible value claim.

NFT Tax Calculator UK 2026 — Capital Gains on NFT Sales

Last updated: March 2026

NFT Capital Gains Tax Calculator 2026/27

Enter your NFT purchase and sale details to calculate your CGT liability

Purchase Price (£) If bought with ETH, use ETH value in £ on the purchase date

Sale Price (£)

Platform / Marketplace Fees (£)

Gas Fees (£)

Other Allowable Costs (£)

Your Marginal Income Tax Rate

Annual CGT Exempt Amount Already Used (£) Maximum annual exempt amount: £3,000 (2026/27)

NFT & Crypto CGT Rates 2026/27

Taxpayer	CGT Rate	Notes
Basic Rate (income < £50,270)	18%	May be 24% if gain pushes above basic band
Higher Rate (income £50,271–£125,140)	24%	Applies to all gains
Additional Rate (income > £125,140)	24%	Applies to all gains
Annual Exempt Amount	£3,000	Shared with all other capital gains

Complete Guide to NFT Tax in the UK 2026/27

How HMRC Treats NFTs

HMRC published guidance in December 2021 and updated it in 2022 and 2023 confirming that non-fungible tokens (NFTs) are a form of crypto asset. They are treated as intangible capital assets for tax purposes — not as currency, not as traditional financial assets, and not as gambling winnings. Every disposal of an NFT is a capital gains event requiring calculation of any gain or loss in sterling.

A "disposal" under HMRC's definition includes: selling an NFT for cash or cryptocurrency, swapping one NFT for another, giving an NFT away as a gift (valued at market price), and using an NFT as collateral in a DeFi protocol if ownership is transferred. Simply holding an NFT in a wallet is not a taxable event.

Calculating Your NFT Gain

The gain on disposal is calculated as:

Gain = Sale Proceeds − Acquisition Cost − Allowable Costs

Sale proceeds are the GBP value received at the date of sale. If you sold for ETH, use the market value of that ETH in GBP on the settlement date. Note that selling an NFT for ETH also means you are acquiring ETH at that value, which becomes your cost basis for any future ETH disposal.

Acquisition cost is the GBP value paid at the date of purchase. If you purchased with ETH, the cost is the GBP value of the ETH you spent on the date of the transaction — and that ETH spending is itself a CGT disposal of the ETH you used.

Allowable costs include gas fees directly connected to the purchase or sale, marketplace commission fees, and incidental costs of disposal. Creator royalties deducted at the point of sale by the smart contract are also deductible as a cost of disposal.

HMRC Pooling Rules — Do They Apply to NFTs?

HMRC's Section 104 share pooling rules require investors to average the cost of identical fungible assets (like Bitcoin, ETH or ERC-20 tokens). Individual NFTs are unique by definition — each token ID is distinct. Therefore, each NFT has its own cost basis and is not pooled with other NFTs.

However, HMRC applies the same-day rule and 30-day bed-and-breakfast rule to crypto assets: if you sell and reacquire the same type of asset within 30 days, the cost basis is the repurchase price (preventing the washing of gains through prompt repurchase). For NFTs this is less practically relevant given uniqueness, but applies to fungible tokens used to purchase NFTs.

NFT Creators: Income Tax Treatment

If you mint and sell NFTs as a business or professional creator — artist, musician, game developer — the proceeds are treated as self-employed trading income, not capital gains. Your profit is revenue from NFT sales minus allowable costs of creation and distribution. This income is declared on your Self Assessment return under self-employment and is subject to income tax and Class 4 NIC.

Royalties on secondary sales: If your NFT contract includes a royalty percentage on secondary market sales (e.g. 5% perpetual creator royalty), these ongoing royalty payments are also trading income, reported on your Self Assessment. Keep records of all royalty payments received — some platforms issue annual summaries; others require manual tracking via blockchain explorer.

Allowable creator expenses include digital art software (Adobe, Procreate), hardware allocated to NFT creation, blockchain transaction costs (gas), marketplace listing fees, and marketing costs. Apportionment is required where equipment is used for personal purposes as well.

DeFi and NFT Staking

Some NFT projects allow staking of NFTs in exchange for token rewards. HMRC's position on DeFi income is that rewards received are income (either trading income or miscellaneous income) at the fair market value at the time of receipt — even if you have not sold them. When you subsequently sell the reward tokens, CGT applies on any further gain from their receipt value.

Lending NFTs on a DeFi platform without transferring ownership is generally not a disposal. But if the platform takes legal ownership (as some lending protocols do), a disposal may arise. HMRC's DeFi guidance (published April 2023 and updated 2024) confirms a case-by-case analysis is required.

HMRC Crypto Disclosure Campaign

HMRC has been actively pursuing crypto and NFT non-compliance. Data-sharing agreements with major exchanges (Coinbase, Kraken, Gemini, eToro) and NFT marketplaces under the OECD's Crypto Asset Reporting Framework (CARF, effective from 2026) mean HMRC receives transaction data automatically. HMRC has run a voluntary disclosure campaign allowing taxpayers to come forward and pay unpaid crypto taxes with reduced penalties.

If you have not declared NFT gains in prior years, use the HMRC Digital Disclosure Service to disclose and pay unpaid tax. Penalties for careless omissions are typically 15–30% on top of the tax due; deliberate non-disclosure can result in penalties of 70–100% of the tax. Coming forward voluntarily significantly reduces penalty exposure.

Record Keeping for NFT Transactions

HMRC requires records for at least 6 years. For NFT trades you should maintain:

Transaction hash for every purchase and sale
Date and time of each transaction (for FX rate calculation)
GBP value at date of transaction (use HMRC-approved rate sources)
Gas fees paid (in ETH and GBP) for each transaction
Marketplace fee schedule and calculated fee amounts
NFT contract address, token ID, name and collection
Exchange rates used and source (e.g. CoinGecko historical data)

Specialist crypto tax software (Koinly, CoinTracker, TaxBit) can import blockchain data and automate gain calculations. Many accountants now specialise in crypto tax and are familiar with NFT-specific complexities.

Worked Examples: NFT Tax 2026/27

Example 1: Basic Rate Taxpayer Selling an NFT at Profit

Purchase price: £500 (0.25 ETH at £2,000/ETH)
Sale price: £4,800
Gas fees: £45 (purchase) + £60 (sale)
Platform commission: £120 (2.5% of £4,800)
Gross gain: £4,800 − £500 = £4,300
Less allowable costs: £225 — net gain: £4,075
Annual CGT exempt amount remaining: £3,000 — taxable gain: £1,075
CGT at 18%: £193.50

Example 2: Higher Rate Taxpayer — No Exempt Amount Remaining

Net gain on NFT sale: £12,000 — exempt amount: already fully used
Taxable gain: £12,000
CGT at 24% (higher rate): £2,880
Net profit after tax: £12,000 − £2,880 = £9,120

Related Calculators

Capital Gains Tax Calculator

CGT on shares and assets

Forex Trading Tax

CFD & forex gains

Income Tax Calculator

NFT creator income tax

Sole Trader Tax

For NFT traders as business

Expert Reviewed — Reviewed by crypto tax specialists familiar with HMRC's NFT and crypto asset guidance. Last verified: March 2026.

Official Sources

UK Calculator Editorial Team

Our calculators are maintained by qualified accountants and tax specialists. All tools use official HMRC data. Learn more.

Last updated: March 2026 | Based on HMRC crypto asset guidance and 2026/27 CGT rates

NFT Tax Calculator UK