Most cryptocurrency disposals are subject to Capital Gains Tax in the UK, as crypto assets are treated as property. Before you can calculate any gain or loss, you need to establish the cost basis of each disposal, and that is where share pooling and matching rules come in.
HMRC applies established share pooling and disposal matching rules to crypto, even though cryptoassets are not shares. These rules determine how disposals are matched to acquisitions and how acquisition costs are tracked by coin type. As a result, they directly affect how gains are calculated when you dispose of your coins.
This article explains how pooling works in practice, how HMRC’s matching rules affect your disposals, and how to apply them using simple examples.
Contents
- 1. Why Share Pooling Applies to Crypto
- 2. How Pooling and Matching Works in Practice
- 3. The Same-Day Rule
- 4. The 30-Day Rule
- 5. Disposals from a Pool
- 6. Tax Planning Considerations
- 7. What to Record and Report
- Conclusion
- FAQs
- References
1. Why Share Pooling Applies to Crypto
Under UK tax law, assets of the same type acquired at different times and prices are grouped into a section 104 pool. This system was originally designed for shares, but HMRC applies the same principle to cryptoassets such as Bitcoin, Ethereum, and Solana.
You must create a separate pool for each token. All your BTC acquisitions go into one BTC pool, all your ETH into another, and so on. These pools act as a running total of how many of each token you own, the total cost paid, and the average cost per token in that pool.
Pooling rules, together with matching rules, were created by HMRC to prevent investors from “cherry-picking” individual transactions when calculating gains or losses. Instead of choosing specific purchases to match with specific disposals in order to create a favourable tax position, you must calculate gains by applying HMRC’s matching and pooling rules.
2. How Pooling and Matching Works in Practice
2.1 Pooling Acquisitions
When you acquire a particular crypto token, HMRC requires you to group your holdings into a “pool” for that token. The pool updates whenever you make a new acquisition that is not matched to a disposal under the same-day or 30-day rule (we cover these later). This includes:
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The very first time you buy a token, or any further acquisitions of the same token before you have made a disposal
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Any acquisitions that remain unmatched after the same-day and 30-day rules have been applied
Each time an acquisition is added to the pool, both the total token quantity and the pooled acquisition cost increase. From this, you can work out your average cost per token, which will often form the base cost for future disposals.
Example 1: Building a Pool
Alice buys ETH for the first time in two transactions:
– 1 ETH for £1,000 on 1 January
– 1 ETH for £2,000 on 10 February
Her ETH pool now contains:
– 2 ETH with a pooled cost of £3,000
– Average cost per ETH = £1,500
The pool acts as the default holding position for acquisitions unless the matching rules apply. Only if the matching rules require a disposal to be matched with a recent acquisition does that acquisition stay out of the pool (at least until the matching is dealt with).
2.2 Disposals and the Matching Rules
When you dispose of some or all of your holdings, whether by selling, swapping, or spending, you need to apply what are known as the matching rules.
The matching rules were introduced by HMRC to prevent investors from crystallising gains or losses in a way that suited their tax position. For example, an investor might sell an asset solely to realise a gain within their annual exemption, and then immediately buy the same asset back. HMRC considered it inappropriate for the investor to benefit from a tax-free gain on such a short-term disposal.
To prevent this behaviour, HMRC developed the matching rules. These rules dictate the order in which disposals must be matched to acquisitions:
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The same-day rule
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The 30-day rule
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Disposals from the pool
Each rule is explained further below.
3. The Same-Day Rule
The first rule that HMRC requires you to apply is the same-day rule.
If you dispose of crypto and acquire the same crypto on the same day, the disposal is matched to that same-day acquisition first:
Example 2: Same-Day Rule
Bob sells 0.5 BTC for £20,000 on 1st March. On that day, his BTC pool contains 0.5 BTC with a pool cost of £17,000.Without the same-day rule, Bob would realise a gain of £3,000. However, later that same day, he buys back 0.5 BTC for £20,000 - the same price he sold it for.
Instead of comparing the £20,000 disposal proceeds to his pooled cost of £17,000, the same-day rule applies. His disposal is matched with the £20,000 acquisition made later that day, leaving a gain of £0.
If the quantity purchased on the same day is not sufficient to match the full disposal, or if there are no purchases on that day, then the 30-day rule must be considered next.
4. The 30-Day Rule
The 30-day rule applies if you acquire the same cryptoasset within 30 days after making a disposal. The rule is designed to prevent ‘bed and breakfasting’ transactions, where investors sell an asset to crystallise a gain or loss and then repurchase it soon after.
Example 3: 30-Day Rule
Clara sells 1 SOL on 1 August for £80. Her pooled cost per SOL before disposal is £50.Ordinarily, Clara would crystallise a gain of £30. However, she reacquired 1 SOL on 15 August for £60, which is within 30 days of the disposal.
The 30-day rule applies, and Clara's disposal proceeds of £80 (1 SOL) are matched with the purchase on 15 August of £60 (1 SOL). This results in a gain of £20.
If, after applying the same-day and 30-day rules, there is still an unmatched disposal quantity, the remaining disposal is then matched with the pooled holding. This is explained in the next section.
5. Disposals from a Pool
Only after the same-day and 30-day rules have been applied do you consider disposals from the pool. A disposal will be taken from the pool when:
- There were no purchases of that token on the same day or within 30 days of the disposal (see Examples 4 and 5 below); or
- The purchase quantity on the same day or within 30 days was less than the disposal quantity (see Example 6).
Example 4: Entire Pool is Disposed of
Alice's pool contains 2 ETH with a pooled cost of £3,000
On 1st March, Alice sells 2 ETH for £5,000. She did not reacquire ETH before 31st March.As Alice made no same-day or 30-day purchases of ETH, her disposal is matched with her pool.
Alice has disposed of her entire holding of ETH, so her gain is the difference between the disposal proceeds and the entire pool cost:
Gain = £5,000 − £3,000 = £2,000
Alice's ETH pool is now empty.
If you dispose of only part of your holdings, the allowable cost is calculated proportionally.
Example 5: Part Disposal from a Pool
Alice’s pool contains 2 ETH with a pooled cost of £3,000.On 1 March, Alice sells 1 ETH for £2,500. She did not reacquire ETH before 31 March.
As Alice made no same-day or 30-day purchases of ETH, her disposal is matched with her pool.
On this occasion, she has disposed of 50% of her holding, so 50% of the pooled cost is allowable for the disposal:
Gain = £2,500 − £1,500 = £1,000
The pool is updated to:
– 1 ETH remaining
– Total pooled cost = £1,500
If quantities purchased on the same day and/or within 30 days of a disposal are not sufficient to cover the disposal quantity, then it will be necessary to partially match the disposal with the same day/30 day purchases and the pool:
Example 6: Same-Day Rule & Balance from the Pool
Bob sells 0.5 BTC on 10 May for £50,000. Later that same day, he buys 0.2 BTC for £11,000.Prior to these transactions, his pool contained 1 BTC with a pooled cost of £25,000.
As there was a purchase of BTC on the same day, the same-day rule applies. However, because the same-day acquisition covered only part of his disposal, the balance is matched with the pool:
– 0.2 BTC is matched to the same-day acquisition (£11,000)
– 0.3 BTC is matched to the pool (0.3 × £25,000 = £7,500)
Bob’s gain is therefore:
– Total cost = £11,000 + £7,500 = £18,500
Gain = £50,000 − £18,500 = £31,500
Depending on the transactions involved, all three rules can apply to a single disposal. For example, selling 1 BTC, followed by a purchase of 0.1 BTC on the same day and 0.5 BTC within 30 days, would result in 0.4 BTC being disposed of from the pool.
6. Tax Planning Considerations
Many crypto investors try to manage their Capital Gains Tax by carefully timing disposals, for example by selling assets to use up their annual exemption or to realise losses that can be set against other gains. This can be a sensible approach, an approach we discuss in our crypto tax planning guidance, but the matching rules can interfere with the outcome if you are not careful.
If you sell a token to crystallise a gain or a loss and then repurchase the same token within the same day or the following 30 days, the disposal will be matched with that repurchase first. This means your planned gain or loss may not be calculated against your pool as you expected.
This is particularly important around the tax year end. Selling just before 5 April to use your allowance, and then repurchasing shortly after in the new tax year, can still trigger the 30-day rule. The problem is that the tax year has already closed, so it's too late to change the disposal or crystallise any further gains or losses for that year.
To help avoid accidental breaches of the 30-day rule, we have also created a 30-day rule calculator. This allows you to enter disposal dates for multiple assets and generate a schedule of repurchase dates that fall outside HMRC’s 30-day matching window.
In the examples below, we have illustrated how the matching rules can interfere with sensible tax planning, resulting in unexpected tax liabilities and wasted annual exemptions.
Example 7: Matching Rules Result in an Unexpected Tax Liability
It is approaching the end of the 2024/25 tax year and James has crystallised gains of £15,000.
On 3 April 2025 he sells 1 BTC for £60,000. His pooled cost for that BTC was £72,000, so he realises a £12,000 loss. James intended for this loss to reduce his net gains from £15,000 to £3,000, which would then be fully covered by the annual CGT exemption and a tax liability would be avoided.
However, on 10 April 2025 (in the new tax year) James buys back 1 BTC for £61,000. Because this is within 30 days of his original disposal, the 30-day rule applies. His 3 April disposal is matched with the 10 April acquisition instead of the pool, meaning the £12,000 loss he thought he had crystallised has been reduced to a loss of only £1,000.
As a result, James is left with net gains of £14,000 for 2024/25, only £3,000 of which is exempt, and an £11,000 taxable gain is now exposed to a CGT liability. The repurchase in the new tax year prevents him from using the loss in the way he intended.
Example 8: Matching Rules Result in Wasted Annual Exemption
Sophie wants to make the most of her annual exemption before the end of the tax year. On 4 April 2025 she sells 0.5 ETH for £5,000. Her pooled cost for this ETH was £2,000, so she realises a gain of £3,000.
Sophie expects this gain to fully utilise her annual exemption rather than let it go to waste.
However, on 20 April 2025 she buys back 0.5 ETH for £4,800. Because this is within 30 days of the original disposal, the 30-day rule applies. The disposal on 4 April is matched with the 20 April repurchase instead of the pool, reducing Sophie’s taxable gain for 2024/25 to just £200.
This means that £2,800 of her £3,000 exemption is wasted, and it's too late to crystallise any other gains for 2024/25 as the tax year has ended.
The key point is that if you are planning disposals to make the most of exemptions or losses, you need to consider the impact of subsequent purchases under the same-day and 30-day rules to avoid unexpected results.
7. What to Record and Report
Following HMRC’s rules is not just about understanding pooling and matching in theory. You also need to keep records that allow you to apply those rules correctly. That means:
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Maintaining a separate pool for each type of cryptoasset
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Recording every acquisition and disposal in pounds sterling
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Keeping track of dates, amounts, and values for each transaction
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Applying the same-day and 30-day matching rules before turning to the pooled cost
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Using the average cost per unit from the pool when working out your gains
In practice, applying the pooling and matching rules manually can become difficult where there is frequent trading activity. Investors therefore often rely on specialist crypto tax software to maintain pools and calculate disposals consistently. This can automate much of the tracking and calculation work, leaving you with records that are HMRC-compliant and reports that can support Self Assessment reporting.
Conclusion
Share pooling and matching rules can become difficult to apply in practice, but when you are trading often, trading multiple crypto assets, or making regular swaps, keeping track manually is almost impossible.
For this reason, many investors use dedicated crypto tax software such as Koinly. It will maintain your pools, apply the same-day and 30-day rules automatically, and give you reports that are HMRC-compliant.
At the same time, remember that the rules can affect your tax planning in ways you might not expect, especially around the end of the tax year. If you are carefully trying to use up allowances or crystallise losses, repurchasing within 30 days can undo the intended tax outcome.
FAQs
Yes. HMRC treats cryptoassets as chargeable assets for Capital Gains Tax and applies the share pooling rules under section 104 TCGA 1992. Acquisitions of the same cryptoasset are grouped into a separate section 104 pool for that token.
No. HMRC does not apply FIFO treatment to cryptoassets. HMRC instead applies the same-day rule, the 30-day rule, and finally the section 104 pool when calculating allowable costs.
When you dispose of a cryptoasset, you must match it in this order: first with acquisitions of the same cryptoasset made on the same day, then with acquisitions made within the next 30 days, and only then with the section 104 pool.
An acquisition goes into the section 104 pool if it is not matched to a disposal under the same-day or 30-day rules. Your initial acquisitions of a token and any unmatched later acquisitions are pooled.
No. HMRC’s matching rules must be followed in the prescribed order. You must apply the same-day rule, followed by the 30-day rule, and then the section 104 pool.
Yes. Matching and pooling apply to your total beneficial holding of a token, regardless of which wallet or exchange the cryptoassets were held on. You should keep records covering all platforms.
If you repurchase the same token within 30 days after the disposal, the 30-day rule still applies, even if the repurchase takes place in the next tax year. This can alter the intended tax outcome and may reduce the expected gain or loss.
For investors with frequent transactions, specialist crypto tax software can help maintain pools, apply HMRC’s matching rules consistently, and produce figures suitable for Self Assessment reporting.
