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UK to use “no gain, no loss” for crypto lending and liquidity pool disposals
HMRC says the approach begins April 6, 2027 and is expected to affect about 700,000 people, trustees, and will defer capital gains tax until an economic disposal.
The UK tax authority, HM Revenue and Customs, said it will change how capital gains tax is applied to certain cryptocurrency disposals tied to lending arrangements and liquidity pools. Starting April 6, 2027, HMRC plans to treat these transactions under a “no gain, no loss” approach, with capital gains generally recognized only when the participant makes an “economic disposal.”
Cointelegraph reports that HMRC expects the measure to affect about 700,000 individuals and trustees. Under UK law for 2025 to 2026, taxpayers pay between 18.0% and 24.0% for capital gains on crypto transactions depending on tax bands, and the new approach is designed to delay that recognition in the specific lending and liquidity pool scenarios.
HMRC linked the change to prior guidance from 2022 on crypto liquidity pools and lending that followed a consultation period, and it said the revision is meant to align tax treatment more closely with the economics of these arrangements. It also described the “no gain, no loss” treatment as applying to disposals of an interest in a lending arrangement in exchange for the same type of asset, including cases involving borrowed assets acquired at market value and similar conditions.
The new rule follows industry input, and Cointelegraph highlighted comments from Aave founder and CEO Stani Kulechov, who said the approach was supported by feedback that alternatives would create significant administrative burden for taxpayers. The guidance is part of an effort to reduce complexity while postponing tax until disposal has an economic effect.