UK’s New DeFi Tax Shift Sparks Hope for Simpler Crypto Rules
- The UK government wants there to be a “no gain, no loss” rule for DeFi activities like lending and staking.
- This means you don’t have to pay taxes on crypto until you sell it or get rid of it.
The UK is making waves in the crypto world with a new plan for taxing decentralized finance, or DeFi. Think about how nice it would be to lend your digital coins without having to worry about taxes all the time. This new rule is meant to do that.
People can lend, borrow, or trade crypto on DeFi without going through a bank. But in the past, every move could lead to a tax event, like capital gains tax, even if you didn’t cash out.
In the past, putting your crypto into a lending pool might have counted as selling it, which would have meant taxes on any price rise. This made things hard and expensive for regular people.
The proposed rule says that DeFi transfers are not taxable. You don’t know how much you gained or lost until you really get rid of your assets, like by selling them for cash.
This is based on talks with HMRC that started in 2023 and continued with updates in 2025. It’s meant to make things easier for people who own crypto, especially when it comes to lending and staking.
For instance, if you put your tokens in a pool, you won’t have to pay taxes on them until you take them out and sell them. This makes things easier for the people in charge and gets more people to join DeFi.
Experts in cryptocurrency say this is a win. It makes it easier for regular people to use DeFi, which makes the UK a better place for digital finance innovation.
Earlier this year, one industry voice, Recap, called for this “composite no gain, no loss framework.” It looks like their ideas helped shape the plan.
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