The Autumn Budget was more crypto friendly than many expected. While several areas of tax policy are tightening, most of the big pre-Budget fears circulating online did not materialise. In fact, the measures announced are largely neutral for crypto investors, with only indirect effects to consider over the coming years.
Below we set out what actually changed, what it means in practice for crypto investors, and the widely rumoured measures that did not happen.
Contents
1. Income Tax thresholds frozen until 2030/31
The Chancellor confirmed that Income Tax thresholds will remain frozen for a further three years, taking the freeze through to the 2030/31 tax year. This is not a crypto specific change, but it will indirectly affect many investors.
Fiscal drag means that as incomes rise due to inflation, more people move into higher tax bands as the thresholds stay the same. For crypto investors, this has two consequences:
- More people will drift into the higher rate band, meaning any crypto income (staking, mining, airdrops) may be taxed at higher rates over time.
- Higher rate taxpayers face higher Capital Gains Tax rates on crypto disposals. As more individuals move into this band, a greater share of crypto gains will fall into the higher CGT rate bracket.
We are already seeing this in practice, particularly where individuals move into higher tax bands without a corresponding change in their underlying crypto activity.
To illustrate how fiscal drag pulls more gains into the higher CGT rate over time, consider the example below:
| 2025/26 | 2026/27 | 2027/28 | |
|---|---|---|---|
| Income | £45,000 | £47,500 | £50,000 |
| Gains after tax-free amount | £5,000 | £5,000 | £5,000 |
| Taxed @ 18% | £5,000 | £2,770 | £270 |
| Taxed @ 24% | £0 | £2,230 | £4,730 |
| Total Tax | £900 | £1,034 | £1,184 |
So even though the gains remain at £5,000 each year, an increasing proportion is pulled into the higher 24% CGT rate as income rises, increasing the tax payable solely due to fiscal drag.
Nothing changes immediately, but the long term effect is already clear in practice. More crypto gains will eventually be taxed at higher rates simply because thresholds remain frozen and the basic rate band is increasingly used up by regular income.
2. ISA reform from April 2027
The Budget confirmed the new ISA structure from April 2027. The overall £20,000 annual limit will remain, but only £8,000 of this will be allocated specifically for investments. In practice, this places a £12,000 cap on cash ISA contributions without restricting those who want to invest the full £20,000 in stocks, funds or other investments.
For crypto investors planning to use crypto ETNs within a Stocks and Shares ISA in 2025/26, this is positive news, as the full £20,000 allowance remains unchanged.
From 2026/27, crypto ETNs will only be eligible for Innovative Finance ISAs (IF ISAs). However, IF ISA subscriptions are expected to fall within the overall £20,000 limit rather than the £12,000 cash cap. This means investors should still be able to contribute up to £20,000 into an IF ISA holding crypto ETNs.
3. Property, savings and dividend rate increases from 2026
The Budget introduced an extra 2 per cent on basic and higher rates for property income, savings income and dividends from 2026.
However, this change will not affect crypto income because crypto income is either taxed as:
- miscellaneous income (minor staking rewards, airdrops or mining); or
- trading income if the individual is treated as running a trade
Neither category falls under savings or dividend tax rates, so these increases will not impact the typical crypto investor.
4. What did not happen
Several rumours and pre Budget predictions circulated widely in the days before the announcement. None of the following materialised:
- No exit tax. There were suggestions of a tax on unrealised gains when leaving the UK. This was not announced.
- No reduction in the CGT annual exemption. The annual exemption remains at £3,000.
- No increase in CGT rates. Rates for crypto remain unchanged at 18% and 24%.
The absence of these measures is notable. It indicates that the Treasury is not currently pursuing major structural changes to taxation of investments or capital gains.
Our View
This Budget was far quieter for crypto than many expected, and in our view that is a positive outcome. Despite speculation about exit taxes and wealth taxes, these either did not transpire or were restricted to assets outside of crypto. Instead, the changes are indirect and mostly driven by wider income tax policy rather than crypto and capital gains specific measures.
From a practical perspective, the fundamentals of crypto taxation have not changed. What has changed is the long term direction of the tax system. With thresholds frozen until 2031, more crypto income and gains will gradually move into higher tax brackets. This is not immediate, but it is predictable, and something we are already factoring into planning discussions with clients.
On ISAs, the reforms appear more cosmetic than restrictive. Provided IF ISAs fall within the £8,000 investment allowance, the amounts that can be invested into crypto ETNs tax-free remain largely intact.
Overall, the Budget continues the trend we have seen throughout 2025. The government is tightening certain areas of the tax system, but crypto is not being singled out. The biggest compliance changes are likely to come from CARF, rather than these Budget announcements.
