HM Revenue & Customs will treat certain disposals involving cryptoasset loans and liquidity pools as "no gain, no loss," deferring Capital Gains Tax until a user makes an economic disposal of the underlying cryptocurrency.
The measure, published Monday, takes effect 6 April 2027 and applies to individuals and trustees entering cryptoasset loan and liquidity pool arrangements, according to the policy paper from the UK government.
The rules cover three scenarios.
An acquisition or disposal of an interest in a single cryptoasset lending arrangement in exchange for cryptoassets of the same type as those invested will be treated on a no-gain-no-loss basis.
Borrowing arrangements will treat borrowed cryptoassets as acquired at market value at the time of borrowing, with any collateral disregarded for CGT purposes. For automated market-making arrangements — liquidity pools operated through smart contracts — a user acquiring an interest in exchange for the same type of cryptoasset is taxed on a no-gain-no-loss basis. On exit, the treatment holds to the extent that the user receives the same quantity originally invested.
