Pooling, the same-day rule and the 30 day rule

The pool

HMRC requires you to group each type of token you own into pools and work out the pooled cost for each type.

So there is not a cost attached to each purchase. There is one running pooled cost per token type, which changes every time you acquire more, and a disposal takes a proportionate slice of it.

Why it is not first in, first out

People reach for first in, first out because it is intuitive and because some other jurisdictions use it. Applying it to a UK position produces the wrong gain.

It also produces a plausible wrong gain, which is worse than an obviously wrong one, because nothing about the output signals the error.

The two rules that sit outside the pool

Pooling does not apply where you buy tokens on the same day that you sell tokens of the same type. And it does not apply where you buy within 30 days of selling tokens of the same type.

Those two match the disposal against the acquisition directly rather than against the pool. For anybody trading actively, a large share of transactions never touches the pool at all.

What the 30 day rule does to a loss

Selling at a loss and rebuying shortly afterwards does not produce the result people expect, because the matching is automatic rather than something you elect into.

If crystallising a loss is part of the plan, that plan needs the rule applied to it in advance, which is a conversation with an adviser rather than an assumption.

The practical consequence

At volume this is not a manual calculation. Software exists to do it and does it well, and the value an accountant adds sits above the arithmetic: completeness of the records, characterisation of unusual receipts, and the judgement calls.

Ask a prospective adviser to show you the working for one token. It takes them five minutes and it answers the capability question completely.