Crypto staking tax rules HMRC 2025 explained: Cryptocurrency staking has become a popular way for investors to earn passive income by participating in blockchain network validation. However, as staking rewards grow, so does the scrutiny from tax authorities like HM Revenue & Customs (HMRC).
With new tax rules expected in 2025, crypto investors must stay informed to avoid penalties and ensure compliance. This guide explains everything you need to know about HMRC’s crypto staking tax rules for 2025, including:
- How HMRC classifies staking rewards
- Income Tax vs. Capital Gains Tax (CGT) on staking
- Reporting requirements for staking income
- Changes expected in 2025
- Tax-efficient staking strategies
By the end of this guide, you’ll understand how to accurately report staking rewards and minimize your tax liability legally.
What Is Crypto Staking?
Proof-of-Stake (PoS) vs. Proof-of-Work (PoW)
Most cryptocurrencies use either:
- Proof-of-Work (PoW): Miners solve complex puzzles to validate transactions (e.g., Bitcoin).
- Proof-of-Stake (PoS): Validators “stake” coins to secure the network (e.g., Ethereum 2.0, Cardano, Solana).
Staking is the process of locking up crypto to support blockchain operations in exchange for rewards.
How Staking Rewards Work
When you stake, you earn:
- Block rewards (newly minted tokens)
- Transaction fees (a share of network fees)
Rewards can be auto-compounded or claimed manually, which affects tax timing.
How HMRC Taxes Crypto Staking (Current Rules)
Are Staking Rewards Considered Income or Capital Gains?
HMRC’s current stance (2024) is that:
✅ Staking rewards are taxable as “miscellaneous income” when received.
✅ Capital Gains Tax (CGT) applies when you later sell the staked coins.
This differs from mining, which HMRC treats as a trade (subject to Income Tax + National Insurance).
Income Tax on Staking Rewards
- Taxed at your marginal rate (20%, 40%, or 45%).
- Based on GBP value at the time of receipt.
- Must be reported via Self-Assessment (SA100).
Example:
- You receive 1 ETH as staking reward when ETH = £2,000.
- You owe £400 Income Tax (if a 20% taxpayer).
Capital Gains Tax (CGT) When Selling Staked Crypto
- CGT applies when you sell, swap, or spend staked coins.
- Cost basis = market value when received.
- Tax-free allowance: £3,000 (2025, down from £6,000 in 2023).
Example:
- You sell the 1 ETH later when ETH = £3,000.
- Capital gain = £1,000 (£3,000 – £2,000).
- CGT due = £200 (20% of £1,000).
HMRC’s 2025 Crypto Staking Tax Updates
Expected Changes in 2025
HMRC is reviewing crypto taxation, and 2025 may bring:
🔹 Clearer guidance on DeFi & liquid staking (e.g., Lido, Rocket Pool).
🔹 Stricter reporting for offshore platforms (following OECD’s Crypto-Asset Reporting Framework).
🔹 Possible alignment with US/EU rules (treating staking rewards as property, not income).
New Reporting Requirements
- Digital Services Tax (DST) may apply to staking platforms.
- More detailed SA100 disclosures for crypto income.
How DeFi & Liquid Staking Will Be Affected
- Liquid staking tokens (e.g., stETH) may be treated differently.
- Restaking (EigenLayer) could complicate tax tracking.
How to Calculate Tax on Staking Rewards
Step 1: Record Reward Dates & GBP Values
Use tools like:
- Koinly
- CoinTracker
- Accointing
Step 2: Apply Income Tax First
- Convert rewards to GBP using exchange rates at receipt.
Step 3: Track CGT Upon Disposal
- Calculate gains when selling staked coins.
Tax Reporting for Crypto Staking in the UK
Self-Assessment (SA100) Requirements
- Report staking rewards under “Other Income” (Box 17).
- Disclose capital gains via Capital Gains Summary.
Record-Keeping Best Practices
- Keep CSV files of all rewards.
- Save exchange rate proof.
Penalties for Non-Compliance
- Late filing: £100 + daily penalties.
- Inaccurate returns: Up to 100% of tax owed.
Tax-Efficient Staking Strategies
✅ Use the £1,000 Trading Allowance (if rewards are under £1,000/year).
✅ Hold staked coins long-term to benefit from lower CGT rates.
✅ Consider staking in an ISA (if HMRC allows it in the future).
FAQs
Q: Do I Pay Tax on Unclaimed Staking Rewards?
A: Only when received or able to withdraw.
Q: What If I Stake on a Foreign Platform?
A: Still taxable in the UK.
Q: How Does Restaking (EigenLayer) Affect Taxes?
A: Likely treated as additional income events.
Conclusion
- Staking rewards are taxable as income when received.
- CGT applies when selling staked coins.
- 2025 may bring stricter reporting rules.
- Use tax tools to track rewards accurately.
Stay compliant and consult a crypto tax specialist if unsure!