https://www.investopedia.com/articles/investing/082914/basics-buying-and-investing-bitcoin.asp
The UK tax authority, HM Revenue & Customs (HMRC), has announced the adoption of a “no gain, no loss” tax treatment for specific cryptoasset loans and liquidity pool transactions. This approach, effective from April 6, 2027, will defer capital gains tax liability until an economic disposal, such as selling or permanently withdrawing tokens, occurs. The move aligns UK crypto tax rules with the economic realities of decentralized finance (DeFi) activities, eliminating prior tax barriers where depositing assets was treated as a taxable disposal. This change applies to single-token lending, borrowing arrangements, and multi-token automated market making scenarios. While the principal deposit is tax-neutral, any rewards or yield earned will continue to be taxed as miscellaneous income in the year received.
The market reaction to HMRC’s decision suggests increased interest in crypto lending and liquidity pools. The “no gain, no loss” framework could attract more participants to these activities, potentially impacting market sentiment for cryptocurrencies like XRP. Markets appear to interpret this regulatory shift as supportive of increased demand for digital assets used in these DeFi contexts.
