Airdrop, Hard Fork & NFT Tax UK

Gold and silver crypto coins on a dark reflective surface, representing airdropped and forked tokens — Free tokens are not always free of tax — and tokens taxed on receipt may still carry a nil cost.

Airdrops: the rule is about why you received them

HMRC’s position at CRYPTO21250 is that Income Tax will not always apply to airdropped tokens received in a personal capacity, where they were received without doing anything in return and outside any trading activity. Where tokens are provided “in return for, or in expectation of, a service”, they are taxable as miscellaneous income or as a trade receipt.

Here is the sting in the tail, and it is the part almost nobody plans for. Airdropped tokens go into their own section 104 pool, or join your existing pool for that token. Section 43 TCGA 1992 — the derived-assets rule — does not apply, because the value of the airdropped token does not derive from tokens you already hold. HMRC does not state what the base cost of a non-taxable airdrop is. In practice, where you gave no consideration for the tokens, there may be no allowable acquisition cost at all — in which case the whole of the proceeds is chargeable when you sell. A tax-free receipt today can mean a fully taxable disposal tomorrow, and the point is worth taking advice on rather than assuming either way.

Where HMRC’s guidance runs out: retroactive airdrops that reward prior protocol usage. The “in return for a service” test does not map cleanly onto a reward for something you did months earlier without any expectation of payment. HMRC has not addressed this, and it is one of the most common real-world fact patterns. It needs a documented position, not a guess.

Why it was given to you decides the income question. The disposal question is separate.

Hard forks: splitting the pool

After a fork you typically hold an equal number of tokens on each ledger. HMRC’s treatment (CRYPTO22300) is that “the new tokens need to go into their own section 104 pool”, and the original allowable cost is apportioned between the two pools under s.52(4) TCGA 1992 on a just and reasonable basis.

HMRC “does not prescribe any particular apportionment method” — but it does have “the power to enquire into an apportionment method that it believes is not just and reasonable”. In other words, you choose the method and you defend it. Where an exchange does not recognise the new token, or valuation is impractical, the options include allocating the whole cost to the original tokens or making a negligible value claim — each of which is open to scrutiny, and each of which should be documented at the time rather than reconstructed years later.

A hand holding several gold crypto coins, representing tokens received without payment — Airdropped tokens enter their own section 104 pool — often with no allowable acquisition cost.

NFTs: not pooled, and barely covered

There is exactly one clear statement from HMRC about NFTs, and it is an important one. CRYPTO22200: “Non-Fungible Tokens (NFTs) are separately identifiable and so are not pooled and no matching rules are applied.” Every NFT is a separate chargeable asset with its own acquisition cost and its own gain or loss computation. The same-day rule and the 30-day rule do not apply to them at all.

Beyond that, NFTs are addressed only incidentally. The Cryptoassets Manual has no NFT chapter, and there is no HMRC statement on minting, on when NFT dealing becomes a trade, or on creator royalty streams. NFTs appear only in three places: the pooling rule at CRYPTO22200, CARF reporting at IEIM8000280, and the scope of the Cryptoasset Disclosure Service. Any firm telling you “HMRC says” about NFT royalties is telling you something HMRC has not said.

In the absence of specific guidance, the general principles apply, and we will tell you which of these is our analysis rather than HMRC’s position:

Situation	Likely treatment	Status
Buying and selling NFTs as an individual collector	Capital Gains Tax, asset by asset, no pooling	Follows directly from CRYPTO22200
Creating and selling NFTs commercially and repeatedly	Trading income on the badges of trade	Our analysis on general principles — no HMRC guidance
Ongoing creator royalties on secondary sales	Most naturally miscellaneous or trading income; potentially intellectual-property income	Our analysis — HMRC has published nothing on point
Play-to-earn and GameFi rewards	Income on receipt where earned for activity, with base cost carried into the pool; in-game asset disposals analysed on ordinary principles	Our analysis on general principles
NFTs and CARF reporting	Treated as relevant cryptoassets where traded on marketplaces, with a carve-out for low-value NFTs with no meaningful trading volume	HMRC guidance at IEIM8000280

NFTs are also expressly within the scope of HMRC’s Cryptoasset Disclosure Service, which covers exchange tokens, non-fungible tokens and utility tokens — so a historic NFT position that was never reported can be put right through the proper route.

A single Bitcoin coin resting in cupped hands, representing a token received as a reward — Every NFT is a separate chargeable asset. No pooling, and no matching rules.

Frequently asked questions

I received an airdrop for free. Do I pay tax on it?

Not necessarily on receipt. If you did nothing in return, received it in a personal capacity and are not trading, HMRC accepts Income Tax will not always apply. But Capital Gains Tax is still live when you dispose of it — and because there is no base cost, the whole of the proceeds is likely to be chargeable.

What if the airdrop was a reward for using a protocol months ago?

This is the genuinely uncertain case. It does not fit neatly into either limb of HMRC’s test. The right approach is to reach a reasoned position on the facts, record why, and disclose it adequately — which is very different from ignoring it.

How should I split my cost base after a fork?

On a just and reasonable basis. HMRC does not prescribe a method, so the common approaches are apportionment by market value on the first day both tokens traded reliably, or by relative market capitalisation. Whichever you use, apply it consistently and keep the working — HMRC can enquire into a method it considers unreasonable.

Can I use the 30-day rule to bed-and-breakfast an NFT?

No. The matching rules do not apply to NFTs at all, because each one is separately identifiable and not pooled. That cuts both ways: it removes a planning route, but it also means an NFT loss is not disallowed by a repurchase within 30 days.

I am an artist selling NFTs. Am I trading?

Very possibly. Creating and selling work commercially, repeatedly and with an eye to profit has all the hallmarks of a trade, which changes the rate, the deductions and the National Insurance position. HMRC has published no crypto-specific guidance here, so the analysis runs on the general badges of trade.

This page is general guidance on UK tax law as at 9 August 2026 and is not advice for any particular person or situation. Tax treatment depends on your individual circumstances and may change. Where we quote HMRC’s internal manuals, note that those manuals are guidance prepared for HMRC staff, are not law, and do not bind HMRC in an individual case. Please take advice before acting. Reviewed by the TaxDigit crypto tax team · Last reviewed 9 August 2026. Updated August 2026.

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TaxDigit is a specialist crypto tax accountant in the UK. Chartered certified accountants advising on airdrops, hard forks, NFTs and token royalties for investors, creators and collectors.

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