UK Krak Card: Tax Information

Yes.

If crypto is sold, converted, or otherwise disposed of to fund a Krak Card purchase, ATM withdrawal, or other transaction, you may need to calculate a capital gain or loss.

HMRC’s Cryptoassets Manual says a “disposal” includes selling tokens for money, exchanging tokens for another token, using tokens to pay for goods or services, and giving tokens away to another person, except certain gifts to a spouse or civil partner.

A Krak Card purchase may look like an ordinary card payment, but if the transaction is funded with crypto, the crypto may be converted into GBP to complete the payment. That conversion may be treated as a disposal for UK tax purposes.

Your Krak Card spends from your Krak Everyday balance using the Spend Order you set in the app. The Spend Order determines which asset is used first. If the first asset does not fully cover the transaction, Krak may move down your Spend Order and combine assets to complete the transaction. For UK customers, the card’s primary currency is GBP. If crypto or a non-primary fiat currency is used, it is converted to GBP when the transaction is authorised.

From a tax perspective, this means you should know which asset or assets were used for each transaction.

It depends on how you fund the balance:

• Depositing GBP. Depositing pounds sterling is not a cryptoasset disposal.
• Buying crypto with GBP. Buying crypto is an acquisition rather than a disposal. The amount you spend, including allowable costs, generally increases the pooled allowable cost of that token.
• Moving crypto you already hold. Transferring crypto between accounts or wallets you beneficially own is generally not a disposal, although any fee paid in crypto may itself be a disposal.
• Converting one crypto into another. A crypto-to-crypto conversion is generally a disposal of the token you give up, even if you never receive GBP.

The taxable event usually arises when crypto is sold or converted, not when it sits in your balance waiting to be spent.

If your Krak Card purchase is funded only with GBP and no crypto is sold, converted, or otherwise disposed of, the purchase generally should not create a cryptoasset disposal.

You should still keep records of the transaction and any rewards received.

If BTC, ETH, or another cryptoasset is sold or converted to fund your Krak Card transaction, you may have a capital gain or capital loss.

Example: You acquired BTC for £500. Later, you use that BTC to fund a £700 Krak Card purchase.

Result:

This is a simplified example. UK cost-basis rules may require pooling, same-day matching, or 30-day matching.

Using a stablecoin may result in little or no gain or loss if the stablecoin remains close to its reference currency. However, a stablecoin transaction may still be a cryptoasset disposal and may still need to be tracked.

Example: You acquire 100 units of a GBP-referenced stablecoin for £100. Later, you use those stablecoins to fund a £100 Krak Card purchase.

Result:

Even where there is no material gain or loss, you may still need records showing the transaction, value, and asset used. A stablecoin that is not referenced to sterling can still produce a gain or loss through movements in the underlying currency.

The asset used depends on your Krak Card Spend Order, available balances, and supported assets. You can reorder or block assets in the app. For example, you may choose to block BTC if you prefer not to spend it.

This can matter for tax because using one asset may create a different gain or loss than using another asset.

If crypto or a non-primary fiat currency is used, Krak Card converts it to your card’s primary currency at the moment the transaction is authorised. For UK customers, that primary currency is GBP.

You should use your transaction records to identify the asset used, amount disposed of, GBP value, date, time, and any relevant fees.

Not necessarily. You may need to calculate gains or losses for crypto-funded Krak Card transactions, but whether you owe tax depends on your overall position for the tax year.

HMRC states that you need to work out your total gains from disposals of assets, including cryptoassets, and if your total gain for the tax year is above the Capital Gains Tax tax-free allowance, you must report and pay Capital Gains Tax. There is no minimum transaction size below which a disposal can be ignored, so small card purchases still need to be included in the calculation.

For the 2025/26 and 2026/27 tax years, the annual exempt amount for individuals is £3,000. Gains above that amount are taxed at 18% or 24%, depending on where the gain falls against your income tax band.

Reporting can be required even where no tax is due. If you are registered for Self Assessment, you generally need to report your disposals if your total gains before losses exceed the annual exempt amount, or if your total disposal proceeds for the tax year exceed £50,000, even if your total gains are within the annual exempt amount.

UK cryptoasset cost-basis rules are different from simple “first in, first out” tracking. HMRC generally applies pooling rules for tokens of the same type.

HMRC explains that each type of token needs its own pool, such as one pool for BTC and another pool for ETH. The pooled allowable cost changes as more tokens are acquired or disposed of. This is commonly called a section 104 pool.

Disposals are matched against acquisitions in a set order:

• Same-day rule – first, against tokens of the same type acquired on the same day;
• 30-day rule – then, against tokens of the same type acquired in the following 30 days, earliest first;
• Section 104 pool – then, against the pooled allowable cost.

Because Krak Card purchases can create frequent small disposals, keeping good records is important.

If you dispose of a token and then acquire the same type of token within the next 30 days, the disposal is matched against that later acquisition instead of your section 104 pool. This can change the gain or loss you report.

This is easy to trigger with card spending. If you spend BTC on Monday and buy BTC again a week later to rebuild your balance, the two transactions may be matched under the 30-day rule rather than treated independently. It also means a loss created by card spending may not be available in the way you expect if you repurchase the same token soon afterwards.

A crypto-to-crypto conversion may itself be a disposal for UK tax purposes. If you convert ETH into a stablecoin and then use the stablecoin for a Krak Card purchase, there may be more than one tax event:

1. the conversion of ETH into the stablecoin; and
2. the later use of the stablecoin to fund the Krak Card transaction.

You should keep records for both steps.

Krak Card rewards paid in fiat may be treated as cashback, a rebate, income, or another category depending on your personal circumstances and how the reward is structured.

HMRC’s published position on cashbacks and discounts is that an ordinary retail customer buying goods, investments, or services at arm’s length is generally not liable to Income Tax or Capital Gains Tax on commission, discounts, or cashbacks they receive, because the payment is linked to their own purchase.

Where a cashback is received in the course of a trade, HMRC treats it as a receipt of that trade.

Tax treatment can therefore vary, particularly for business users, promotional bonuses, referral payments, or rewards received in connection with a trade.

You should consult a tax adviser regarding your specific circumstances.

BTC rewards may have two separate tax considerations:

1. When received: BTC rewards may be treated as cashback, a rebate, income, or another category depending on your circumstances.
2. When later sold, converted, spent, transferred, or otherwise disposed of: Any change in value after receipt may result in a capital gain or loss.

Example: You receive £10 worth of BTC as a Krak Card reward. Later, you sell that BTC for £16.

Result:

In most cases the GBP value of the BTC when it is credited to your account becomes the acquisition cost that enters your BTC pool, so that only the later increase in value is measured on disposal. HMRC has not published specific guidance on the acquisition cost of cryptoasset cashback, so this is an area of uncertainty and you should consider taking advice.

You should keep a record of the GBP fair market value of BTC when the reward is credited to your account.

That value may be relevant for:

• determining the tax treatment of the reward when received;
• calculating any later gain or loss;
• supporting your records if HMRC asks for details.

HMRC guidance for cryptoassets received by individuals says records should include the type of tokens, date received, number of tokens received, total number held, value in pound sterling, bank statements, and disposal details if later disposed of.

If you receive a refund for a Krak Card purchase, Krak returns the card’s primary currency back to your Krak Everyday account. For UK customers, this will generally be GBP. If crypto was used in the original transaction, Krak does not automatically convert the refund back into crypto.

From a tax perspective, the original crypto disposal may still have occurred when the crypto was converted to fund the purchase. A later GBP refund may not automatically reverse the original gain or loss. You may also see an adjustment to any associated rewards.

If you use the refunded GBP to buy back the same token within 30 days of the original disposal, the 30-day matching rule may apply.

You should keep records of:

• the original transaction;
• the crypto or fiat used;
• the GBP value;
• the refund;
• any rewards adjustment.

If an ATM withdrawal is funded by selling or converting crypto, the conversion may be a taxable disposal. If the ATM withdrawal is funded only with GBP, the withdrawal generally should not create a cryptoasset disposal.

Any Krak fees for ATM withdrawals are set out in the applicable Krak Card fee schedule. Third-party ATM operators may also charge their own fees.

Fees and conversion costs may affect the economic result of a transaction and may be relevant to your tax calculation, depending on the applicable UK tax rules and the nature of the cost. Costs incurred wholly and exclusively in acquiring or disposing of a cryptoasset may be allowable, while other costs may not be.

You should retain records of any:

• conversion fee;
• third-party ATM fee;
• transaction cost;
• fee paid in crypto.

A fee paid in crypto may itself be a disposal of that crypto.

A disposal can produce a capital loss as well as a gain, for example where the value of a token has fallen since you acquired it. Losses in the same tax year are set against gains in that year, and unused losses can generally be carried forward.

Losses are not automatic. A capital loss must be quantified and notified to HMRC, normally within four years of the end of the tax year in which it arose, either on your Self Assessment return or by separate written claim. If you do not claim within that period, you may not be able to use the loss against later gains.

The guidance above is written for individuals using the card for personal spending. If you use the card in connection with a trade, profession, or business, the treatment can be different:

• cashback or rewards received in the course of a trade are generally a receipt of that trade;
• crypto activity may in some cases be treated as trading rather than investment, which changes the tax treatment from Capital Gains Tax to Income Tax;
• record-keeping obligations and retention periods are longer for businesses;
• if the card is held by a company, corporation tax rules apply instead.

You should take advice if any of your Krak Card activity relates to a business.

HMRC states that individuals are responsible for keeping their own records for each cryptoasset transaction, and that electronic records may be requested showing full details of transactions and supporting valuation records for acquisition and disposal tax points.

For Krak Card activity, you should consider keeping records of:

• date and time of each Krak Card transaction;
• merchant and transaction type;
• asset or assets used;
• amount of crypto sold or converted;
• GBP value at the time of transaction;
• exchange rate;
• fees;
• acquisition date and cost basis or pooled allowable cost;
• rewards received in fiat or BTC;
• GBP value of BTC rewards when credited;
• refunds, reversals, disputes, and chargebacks;
• CSV exports, account statements, and transaction details.

Individuals in Self Assessment are generally required to keep records until at least one year after the 31 January filing deadline for the relevant tax year, extended to five years where a trade, profession, or business is carried on. In practice you may want to keep cryptoasset records for longer, because pooled allowable cost depends on your full acquisition history and because loss claims and HMRC enquiries can look back several years.

You can view Krak Card transaction details in the Krak app. Kraken also provides document and export tools. In Kraken Pro, the Document Center can provide account statements, balance reports, ledger exports, trade exports, and, where available, tax forms or regulatory reports.

These records may help you or your tax adviser prepare your UK tax return, but they may not include your complete tax position across other wallets, exchanges, or platforms.

No. Kraken may provide transaction history, statements, exports, or tax-related information, but these materials are provided for informational purposes and may not reflect your full tax position.

Your tax result may depend on:

• crypto held on other platforms;
• self-custody wallets;
• prior acquisition costs;
• transfers in or out;
• UK pooling rules;
• same-day and 30-day matching;
• rewards;
• refunds;
• business or personal use;
• your total income and gains for the tax year.

You are responsible for determining your UK tax obligations and filing accurate returns.

Kraken is required to collect and report certain account, customer, tax residency, and aggregated transaction information to HMRC under the Cryptoasset Reporting Framework, or CARF.

The UK rules took effect on 1 January 2026. HMRC guidance states that UK cryptoasset service providers must collect data and report to HMRC, with the first report covering the period 1 January 2026 to 31 December 2026 and due by 31 May 2027.

Different parts of your account may fall under different reporting regimes. Cryptoasset activity is reported under CARF, while balances held in certain electronic money products may instead fall within the Common Reporting Standard.

Reporting to HMRC does not calculate your tax for you. You are still responsible for reporting your own gains and losses.

HMRC guidance states that users of UK cryptoasset service providers may need to provide identifying information such as name, date of birth, home address, country of residence, and, for UK residents, a National Insurance number or Unique Taxpayer Reference.

If you are asked to confirm your tax details, it is important to respond. Providing accurate tax information helps Kraken meet its reporting obligations and may help you keep your own tax records complete.

If your Krak Card transaction causes crypto to be sold, converted, or otherwise disposed of, you may need to calculate a gain or loss for UK Capital Gains Tax purposes. Keep records of every transaction, and check your overall position for the tax year rather than assessing purchases individually.