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UK Tax Authority Announces ‘No Gain, No Loss’ Treatment for Select Crypto Transactions

UK Tax Authority Announces ‘No Gain, No Loss’ Treatment for Select Crypto Transactions

HMRC to defer capital gains tax on eligible crypto lending and liquidity pool transactions.

Written by Rahul Dhingra, Edited by David Delima | Updated: 15 July 2026 17:15 IST

UK Tax Authority Announces ‘No Gain, No Loss’ Treatment for Select Crypto Transactions

Photo Credit: Unsplash/Szymon Shields

New tax framework aligns crypto lending rules with economic ownership

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Highlights

New rules are expected to affect around 700,000 taxpayers
Eligible DeFi transactions will receive deferred tax treatment
Changes will take effect from April 6, 2027

The UK's tax agency intends to apply the “certain disposals” concerning crypto lending and liquidity pools as deals that will allow the tax country to defer its capital gains obligation. In a Monday statement, HM Revenue and Customs (HMRC) has announced that as of April 6, 2027, it will implement a “no gain, no loss” policy on deals concerning crypto lending and liquidity pools. As per the tax agency, this step will defer capital gains taxes on digital currencies “until an economic disposal.”

HMRC Defers Capital Gains Until Crypto Assets Are Economically Disposed

The new regulation will affect around 700,000 people and trustees, making it a major departure from the previous guidance published by the tax authority in 2022 following consultation regarding crypto liquidity pools and loans. In terms of capital gains arising from crypto transactions under UK tax law in the years 2025-26, the rate ranges between 18 percent and 24 percent, depending on whether they qualify as basic-rate or higher-rate.

Crypto Regulations Discussion

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“This measure will support fairness in the tax system,” said the UK tax authority. “It aligns the tax treatment more closely with the economics of these arrangements by ensuring that gains and losses are generally recognised only when the participant makes an economic disposal of the cryptoassets.”

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As per the tax authority, any crypto transactions would be treated as a “no gain, no loss” under UK capital gains tax law for the purchase or sale of an interest in a lending facility by exchange for an identical kind of asset and borrowing assets acquired at market price through automated market makers.

Aave founder and CEO Stani Kulechov, in an X post, “This is the right direction, mainly driven by the industry feedback demonstrating that any other approach would cause significant admin burden for the taxpayer.”

While these measures could be a catalyst for the future of crypto in the UK, earlier in April, the UK's Financial Conduct Authority (FCA) said it is seeking guidance for the country's future crypto rules, the latest step towards a broader framework expected to take effect on October 25, 2027. This proposed guidance supports the FCA's goal for an open, sustainable, and competitive crypto market that is trustworthy for crypto users.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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Further reading: Crypto Regulations, uk crypto regulating, crypto tax

Rahul Dhingra

Email Rahul Dhingra

Rahul Dhingra is a crypto writer at Gadgets 360, where he covers the exciting world of Cryptocurrency, Blockchain, Defi and Web3. Before joining Gadgets 360, he worked as a content specialist for a European-based Crypto Exchange. Rahul loves storytelling, not just through the written word but also through the visual medium. Beyond his professional life, Rahul is a sports fanatic. Whether it’s cricket or football, his passion for the game is contagious. More