Crypto ETNs in the UK: Can You Invest in Crypto Tax-Free via an ISA?

Crypto ETNs in the UK | Invest in Crypto Tax-Free 2025

Introduction 

Cryptocurrency has quickly moved from a niche investment to a mainstream topic. In the UK, more investors are exploring ways to gain exposure to digital assets while keeping their tax bills under control. A question we often hear is: “Can I invest in crypto tax-free using an ISA?” 

While HMRC does not allow direct cryptocurrency holdings inside an ISA, there are related products particularly Crypto ETNs (Exchange-Traded Notes) – that may provide indirect exposure. Recent FCA approval for crypto ETNs (Exchange-Traded Notes) now offers a regulated, tax-efficient option. This guide explains what crypto ETNs are, how they work inside an ISA, and the tax benefits and risks to be aware of. 

What Are Crypto ETNs? 

Crypto ETN meaning 

A Crypto ETN (Exchange-Traded Note) is a listed financial product that tracks the value of a cryptocurrency such as Bitcoin or Ethereum. Unlike direct crypto ownership, ETNs are debt instruments that trade on regulated exchanges. Unlike exchange-traded funds (ETFs), which hold underlying assets, ETNs are unsecured debt securities that promise to deliver returns based on the asset’s price movements. 

Pros of ETNs: easy to buy and sell, regulated environment, no wallet management. 
Cons of ETNs: issuer risk, fees, and no ownership of the underlying crypto. 

FCA Approves Crypto ETNs for Retail Investors 

In 2025, the UK’s Financial Conduct Authority (FCA) lifted restrictions and allowed retail investors to access crypto ETNs. 

• Previously, ETNs and crypto derivatives were restricted to professional investors. 

• The FCA’s ban on crypto-asset derivatives remains, but ETNs are now available to the wider public. 

• This is a significant step, giving UK investors a regulated path into crypto markets. 

Can You Hold Crypto ETNs in an ISA? 

Yes potentially. Because ETNs are listed securities, some Stocks & Shares ISA providers may allow them if the ETN is on a recognised exchange. 

Benefits: 

• Crypto ETNs in ISA = tax-free gains (no Capital Gains Tax). 

• No Income Tax on distributions. 

• No need to declare trades to HMRC. 

Availability depends on your ISA platform. Not all providers currently offer crypto ETNs. 

Tax Benefits of Crypto ETNs in an ISA 

• Avoid CGT: UK crypto investors outside ISAs must pay Capital Gains Tax above £3,000 annual allowance (2024/25). Inside an ISA, no CGT applies. 

• No reporting: Gains or disposals within the ISA don’t need to be reported to HMRC. 

• Tax-efficient growth: Any price appreciation of the ETN remains untaxed while inside the ISA. 

Risks of Investing in Crypto ETNs 

• Volatility – ETNs mirror crypto’s price swings. 

• Issuer risk – ETNs are unsecured debt. If the issuer defaults, your money is at risk. 

• Limited availability – Not all ISA providers offer crypto ETNs. 

• Fees – Higher costs compared to direct crypto. 

• No staking or on-chain use – You don’t own the crypto itself. 

Practical Steps for UK Investors 

1. Check if your ISA provider allows crypto ETNs. 

2. Confirm the ETN is listed on a recognised UK exchange. 

3. Review fees, terms, and issuer risk. 

4. Seek tax advice before making decisions. 

5. Stay updated with FCA and HMRC rules as regulation evolves. 

Conclusion 

With the FCA now permitting retail access to crypto ETNs, UK investors may finally have a compliant way to gain crypto exposure tax-free through an ISA. 

While you can’t hold crypto directly in an ISA, crypto ETNs in a Stocks & Shares ISA may offer the next best thing combining regulated market access with powerful tax advantages. 

But remember: ETNs carry risks, and not all providers currently support them. Always do your due diligence and seek tailored tax and financial advice before investing

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DISCLAIMER

© My Accountancy Team 2025 All Rights Reserved – The above articles are provided for guidance only and may not cover your personal circumstances so you should not rely on them. It is important that you seek appropriate professional advice which takes into account your personal circumstances where you can provide the full facts of the case and all documents related to your case. My Accountancy Team Ltd t/a mycryptotax.co.uk, cannot be held responsible for the consequences of any action or the consequences of deciding not to act.