NFT Tax UK: How Are NFTs Taxed by HMRC?
NFTs (Non-Fungible Tokens) are treated as cryptoassets by HMRC and follow the same general tax rules as other cryptocurrency, with some unique twists.
Creating (minting) an NFT is not a taxable event in itself — you are creating an asset, not disposing of one. However, selling an NFT you created is taxable as either income (if you are trading) or capital gains (if it is a one-off or investment activity). The gas fees paid to mint can be added to your cost basis.
Buying and reselling NFTs follows standard CGT rules. Your gain is the sale price minus the purchase price and allowable costs (gas fees, marketplace fees). Royalties received from secondary sales are taxed as income — either trading income or miscellaneous income depending on your level of activity.
Frequently Asked Questions
Can I offset NFT losses?
Yes. If you sell an NFT for less than you paid, the loss can be offset against other capital gains. If the NFT becomes worthless, you may be able to claim a negligible value claim.
Are gas fees deductible?
Gas fees for acquiring an NFT are added to cost basis. Gas fees for disposing are deductible from proceeds. Gas fees for failed transactions are generally not deductible.
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