UK to Defer Capital Gains Tax on DeFi Lending, Liquidity Pool Deposits
HMRC will stop treating deposits of cryptoassets into DeFi lending protocols and liquidity pools as taxable disposals. From 6 April 2027, these transfers will get “no gain, no loss” treatment, so capital gains tax is deferred until a real economic disposal occurs. The change amends the Taxation of Chargeable Gains Act 1992 and is expected to affect about 700,000 individuals and trustees. The new rules cover lending a cryptoasset, borrowing one, and supplying tokens to an automated market maker. Entering or exiting these arrangements with the same asset will not trigger tax, and collateral posted for a loan will be ignored for capital gains tax. In liquidity pools, tax arises only if withdrawals differ from the original deposit. The move reverses earlier guidance that could tax users on paper gains before they sold anything, and it aims to reduce administrative burden while matching tax to actual economics.
