{"id":47769,"date":"2026-07-14T14:54:26","date_gmt":"2026-07-14T14:54:26","guid":{"rendered":"https:\/\/cryptomag.finance\/?p=47769"},"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:\/\/cryptomag.finance\/?p=47769","title":{"rendered":"UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools"},"content":{"rendered":"<p><a rel=\"nofollow\" href=\"https:\/\/bitcoinmagazine.com\/\">Bitcoin Magazine<\/a><br \/>\n<img decoding=\"async\" src=\"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2026\/07\/UK-Adopts-No-Gain-No-Loss-Tax-Treatment-for-Crypto-Lending-and-Liquidity-Pools.jpg\" \/><br \/>\n<a rel=\"nofollow\" href=\"https:\/\/bitcoinmagazine.com\/news\/uk-adopts-no-gain-no-loss-tax-crypto\">UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools<\/a><\/p>\n<div><\/div>\n<p class=\"wp-block-paragraph\">The United Kingdom\u2019s HM Revenue &amp; 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<p class=\"wp-block-paragraph\">The measure, <a href=\"https:\/\/www.gov.uk\/government\/publications\/cryptoasset-loans-and-liquidity-pools\/tax-treatment-of-cryptoasset-loans-and-liquidity-pools\" target=\"_blank\" rel=\"noopener\">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<p class=\"wp-block-paragraph\">It <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/1992\/12\/contents\" target=\"_blank\" rel=\"noopener\">amends<\/a> the Taxation of Chargeable Gains Act 1992.<\/p>\n<p class=\"wp-block-paragraph\">The rules <a href=\"https:\/\/www.theblock.co\/post\/408206\/uk-hmrc-adopts-no-gain-no-loss-tax-treatment-for-crypto-lending-liquidity-pools\" target=\"_blank\" rel=\"noopener\">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<p class=\"wp-block-paragraph\">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<p class=\"wp-block-paragraph\">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<p class=\"wp-block-paragraph\">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<h2 class=\"wp-block-heading\">HMRC simplifies DeFi crypto tax rules<\/h2>\n<p class=\"wp-block-paragraph\">The measure addresses problems that <a href=\"https:\/\/bitcoinmagazine.com\/business\/british-revenue-and-customs-agency-clarifies-law-crypto-taxes\">arose from HMRC\u2019s own 2022 guidance<\/a>, which stakeholders said produced disproportionate administrative burdens.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">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<p class=\"wp-block-paragraph\">HMRC published a summary of responses at Budget 2025 and set out its approach at that time.<\/p>\n<p class=\"wp-block-paragraph\">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<p class=\"wp-block-paragraph\">The current UK regime treats <a href=\"https:\/\/bitcoinmagazine.com\/business\/cryptocurrency-taxes-in-the-uk-what-you-need-to-know\">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<p class=\"wp-block-paragraph\">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<p>This post <a rel=\"nofollow\" href=\"https:\/\/bitcoinmagazine.com\/news\/uk-adopts-no-gain-no-loss-tax-crypto\">UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools<\/a> first appeared on <a rel=\"nofollow\" href=\"https:\/\/bitcoinmagazine.com\/\">Bitcoin Magazine<\/a> and is written by <a rel=\"nofollow\" href=\"https:\/\/bitcoinmagazine.com\/authors\/micahzimmerman\">Micah Zimmerman<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Bitcoin Magazine UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools The United Kingdom\u2019s HM Revenue &amp; 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, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":47770,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[],"tags":[],"class_list":["post-47769","post","type-post","status-publish","format-standard","has-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools - Cryptomag<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptomag.finance\/?p=47769\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools - Cryptomag\" \/>\n<meta property=\"og:description\" content=\"Bitcoin Magazine UK Adopts \u2018No Gain, No Loss\u2019 Tax Treatment for Crypto Lending and Liquidity Pools The United Kingdom\u2019s HM Revenue &amp; 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. 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