{"id":198016,"date":"2026-07-14T14:54:26","date_gmt":"2026-07-14T14:54:26","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=198016"},"modified":"2026-07-14T14:54:26","modified_gmt":"2026-07-14T14:54:26","slug":"uk-adopts-no-gain-no-loss-tax-treatment-for-crypto-lending-and-liquidity-pools","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=198016","title":{"rendered":"UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools"},"content":{"rendered":"

Bitcoin Magazine<\/a><\/p>\n

UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools<\/a><\/p>\n

<\/div>\n

The United Kingdom\u2019s HM Revenue & Customs will treat certain disposals involving cryptoasset loans and liquidity pools as \u201cno gain, no loss,\u201d deferring Capital Gains Tax until a user makes an economic disposal of the underlying cryptocurrency.<\/p>\n

The measure, published<\/a> Monday, takes effect 6 April 2027 and applies to individuals and trustees who enter cryptoasset loan and liquidity pool arrangements, according to the policy paper.\u00a0<\/p>\n

It amends<\/a> the Taxation of Chargeable Gains Act 1992.<\/p>\n

The rules cover three scenarios<\/a>. In a single cryptoasset lending arrangement, a user who acquires or disposes of an interest in exchange for cryptoassets of the same type as those invested will be taxed on a no-gain-no-loss basis.\u00a0<\/p>\n

Borrowing arrangements will treat borrowed cryptoassets as acquired at market value at the time of borrowing, with any collateral disregarded for Capital Gains Tax purposes.<\/p>\n

For automated market-making arrangements \u2014 liquidity pools operated through smart contracts \u2014 a user acquiring an interest in exchange for the same type of cryptoasset is also taxed on a no-gain-no-loss basis. On exit, that treatment holds to the extent the user receives the same quantity first invested. Any difference between what was invested and what is received triggers a gain or a loss.<\/p>\n

HMRC said the change aligns tax treatment with the economics of these arrangements, recognizing gains and losses only when a participant makes an economic disposal.<\/p>\n

HMRC simplifies DeFi crypto tax rules<\/h2>\n

The measure addresses problems that arose from HMRC\u2019s own 2022 guidance<\/a>, which stakeholders said produced disproportionate administrative burdens.\u00a0<\/p>\n

A call for evidence ran from July to August 2022, followed by a consultation between 27 April and 22 June 2023 that sought to align tax with economic substance by not treating crypto used in DeFi lending and liquidity pools as a taxable disposal.\u00a0<\/p>\n

HMRC published a summary of responses at Budget 2025 and set out its approach at that time.<\/p>\n

The change is expected to affect about 700,000 individuals who engage in these transactions, according to the paper. HMRC said users will benefit from a framework that is easier to understand.<\/p>\n

The current UK regime treats crypto as an investment asset<\/a>, with selling, swapping, or spending it counting as a disposal for Capital Gains Tax at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. The new treatment modifies that disposal rule for certain lending and liquidity pool arrangements.<\/p>\n

Final costing will be subject to scrutiny by the Office for Budget Responsibility and set out at a future fiscal event. HMRC said the measure is not expected to have any significant macroeconomic impact.<\/p>\n

This post UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools<\/a> first appeared on Bitcoin Magazine<\/a> and is written by Micah Zimmerman<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin Magazine UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools The United Kingdom\u2019s HM Revenue & Customs will treat certain disposals involving cryptoasset loans and liquidity pools as \u201cno gain, no loss,\u201d deferring Capital Gains Tax until a user makes an economic disposal of the underlying cryptocurrency. The measure, […]<\/p>\n","protected":false},"author":0,"featured_media":198017,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-198016","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/198016"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=198016"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/198016\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/198017"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=198016"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=198016"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=198016"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}