- HM Revenue and Customs (HMRC) will treat certain crypto loan and liquidity pool disposals as “no gain, no loss” starting April 6, 2027.
- The policy defers capital gains tax until an “economic disposal,” aligning tax treatment with the economics of the arrangements.
- Roughly 700,000 individuals and trustees are expected to be affected by this significant policy shift from HMRC’s 2022 guidance.
The UK’s tax authority, HM Revenue and Customs, announced on Monday that it will adopt a “no gain, no loss” approach for disposals involving cryptoasset loans and liquidity pools. This measure, effective April 6, 2027, defers capital gains tax on digital assets for roughly 700,000 individuals and trustees until an “economic disposal” occurs.
Consequently, the UK tax authority stated it supports fairness in the system by ensuring gains and losses are recognized only when a participant makes an economic disposal. This policy represents a major shift from the authority’s 2022 guidance following a consultation period.
Under current UK law, taxpayers pay between 18% and 24% in capital gains tax on crypto transactions. The new rule treats the acquisition or disposal of an interest in a lending arrangement as a “no gain, no loss” transaction when exchanged for the same type of asset.
Aave founder and CEO Stani Kulechov said on X that this is the right direction driven by industry feedback. He noted that any other approach would cause a significant administrative burden for the taxpayer.
Meanwhile, in UK politics, Reform leader Nigel Farage will face a crypto candidate in the Clacton by-election scheduled for Aug. 13. Stephen Newnham, leader of Solana community group Superteam UK, announced he will run as an independent candidate.
Farage triggered the by-election after his resignation, which followed reports of a $6.7 million donation from crypto billionaire Christopher Harborne. The Reform figure described the donation as a “reward” for the UK’s exit from the European Union.
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