Can I Put Crypto ETNs in A Stocks and Shares ISA?

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The Financial Conduct Authority (FCA) has lifted the ban on selling crypto Exchange-Traded Notes (cETNs) to retail investors, but can any profits on this new product be shielded from the taxman?

Fortunately HM Revenue & Customs (HMRC) has confirmed that you can include cETNs and enjoy any growth within the traditional investment ISA tax-free wrapper… but not for long.

From April 6, 2026, which marks the start of the new tax year, cETNs will have to be held in an Innovative Finance ISA (IFISA) instead as they’ll no longer qualify for a Stocks and Shares ISA due to a change in classification of the product.

If you buy a cETN and add it to your ISA before the cut-off date, the product will automatically be given IFISA status without losing the tax benefits as of next year, but you’ll need to have opened an IFISA account to add the investment to.

Whether you buy a cETN now or wait until the new tax year, any investment you make will have to stay within your overall £20,000 ISA allowance, assuming this isn’t changed by the Government.

HMRC has said that the temporary ISA classification is to allow easier access to the product during the launch period before it becomes more ‘innovative’ and joins other alternative assets that fall into this class, such as peer-to-peer loans.

If you hold cETNs outside of the ISA tax wrapper, any gains will be subject to Capital Gains Tax (CGT) of 10-20% depending on your tax band and after your £3,000 personal allowance. No income tax will apply unless the cETN distributes income, which is unlikely to happen.

HMRC added that it will continue to review the status of cETNs as the market matures and may potentially allow broader ISA inclusion at a later date.

Where can I buy a crypto ETN?

Crypto ETNs trade on the London Stock Exchange in the same way as shares or other products, such as Exchange-Traded Funds (ETFs).

Many mainstream brokerage/trading platforms will offer the product through a general trading account but you’ll need to pass a suitability test before you can gain access to them.

You’ll need to check with your broker to see if they support cETN trading and which providers’ products are available.

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