"This is a significant victory for the DeFi community in the UK," said one industry insider following the announcement from HMRC. In a move that has pleased crypto holders across the nation, the UK government confirmed that starting April 6, 2027, there will be no Capital Gains Tax on crypto loans or deposits in liquidity pools. This new measure is expected to impact approximately 700,000 users who have previously faced tax implications simply for engaging in these activities.
The new policy effectively initiates a "no gain, no loss" regime, meaning taxes will only be incurred when users sell or exchange their assets. Previously, merely depositing tokens into a lending platform or liquidity pool was considered a taxable event, which created uncertainty and potential financial burdens for investors.
According to the July 13 policy paper released by HMRC, various scenarios have been addressed to clarify how the new tax rules will be implemented. For example, if a crypto holder swaps tokens for an interest in the same asset type, the transaction will be treated on an NGNL basis. This means that the borrower is seen as acquiring the borrowed coins at market value when the loan is initiated, allowing for a smoother process without immediate tax liabilities.
This update comes in response to earlier guidance from HMRC that faced criticism from industry stakeholders for being overly burdensome. By amending the Taxation of Chargeable Gains Act 1992, the agency aims to provide a more favorable environment for those participating in decentralized finance. The adjustments are a clear indication that the UK is eager to support innovation in the crypto space, aligning its regulatory framework with the evolving nature of digital assets.
This material is informational and not financial advice.
