HMRC confirms crypto ETN ISA rules
With crypto ETNs now technically available for UK retail investors, HMRC has confirmed they can be held in an ISA – but there’s a complication


HMRC has confirmed the ISA status of crypto ETNs on the day on which they are permitted for sale to UK retail investors.
The FCA’s longstanding ban on the sale of cryptocurrency (crypto) exchange-traded notes (ETNs) to UK retail investors lifts today (8 October).
What this means in practice is that issuers can submit prospectuses for these products. The earliest that retail investors will realistically be able to buy crypto ETNs will be 13 October. That depends, too, on them using a broker or platform that offers crypto ETNs.
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The biggest question mark following the lifting of the FCA ban was around the ISA status of crypto ETNs.
While it is legal to buy, hold and sell crypto in the UK, it can’t currently be held in an ISA. Investors who wanted exposure to crypto price movements within the tax-efficient ISA wrapper had to buy crypto proxy stocks, like Strategy (NASDAQ:MSTR) (formerly MicroStrategy), or funds that are comprised of similar stocks.
These kinds of investments can (ironically) be more volatile than the prices of the cryptocurrencies they are intended to mirror. But the only other means of investing in crypto would expose holders to paying capital gains tax (CGT) on any gains they realised.
"Allowing individuals to gain exposure through tax-efficient methods and proven vehicles will allow for a more secure and mature method of adding Bitcoin and Ethereum to investment portfolios," said Russell Barlow, CEO of 21Shares.
HMRC today (8 October) issued its guidance on the tax treatment of crypto ETNs, which confirms the ISA status of crypto ETNs.
Crypto ETNs can be held in an ISA – but it’s complicated
HMRC’s statement confirms that crypto ETNs can be held in an ISA. That means that investors will be able to shield them from CGT.
"Today's confirmation that crypto asset-backed ETNs will be eligible for inclusion in investors’ ISA and SIPP portfolios represents a massive step forward that we believe will significantly benefit investors and savers in the long-term," said Barlow.
But it’s not completely straightforward. The crucial paragraph is below:
"Initially, cETNs will be automatically eligible for inclusion in stocks and shares ISAs. From 6 April 2026, they will be reclassified as qualifying investments within the Innovative Finance ISA (IFISA)."
So to begin with, investors will be able to hold crypto ETNs in a stocks and shares ISA, but that will change at the start of the next tax year. From that point onwards, you will no longer be able to buy crypto ETNs into a stocks and shares ISA and will only be able to do so using an Innovative Finance ISA.
MoneyWeek has asked HMRC for confirmation on whether crypto ETNs that are purchased in a stocks and shares ISA before 6 April, 2026 can continue to be held in one after that date.
Will crypto ETNs be eligible for stocks and shares ISA in future?
The upshot is that there is a roughly six-month window in which crypto ETNs can be held in a stocks and shares ISA. It seems that you’ll need to open an Innovative Finance ISA if you want to buy them (and, perhaps, continue to hold them) after this date.
However, HMRC’s note did acknowledge that this could change in future:
"The government will keep the inclusion of cETNs in tax-advantaged accounts under review with a view to including them in the stocks and shares ISA at a later date as the market matures and as consumer understanding deepens."
MoneyWeek will bring further updates and reaction as soon as possible.
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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.
Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.
Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.
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