The UK Tax Office has announced that it plans to treat “certain disposals” related to cryptocurrency lending and liquidity pools as transactions that would effectively delay the country’s capital gains requirements.
In an announcement on Monday, HM Revenue and Customs (HMRC) said that from April 6, 2027, it would adopt a “no win no loss” approach to disposals involving crypto loans and liquidity pools. According to the tax administration, this measure would defer capital gains tax on digital assets “until an economic transfer”.
“This measure will contribute to the fairness of the tax system,” the British tax office said. “This more closely aligns tax treatment with the economic aspects of these arrangements by ensuring that gains and losses are generally only recognized when the participant makes an economic disposition of the crypto-assets.”
The measure, which is expected to affect around 700,000 individuals and administrators, would represent a significant change from the authority’s 2022 guidance on crypto liquidity pools and lending following a consultation period. Under the United Kingdom law for 2025-2026, taxpayers pay between 18% and 24% for capital gains linked to crypto transactions depending on whether they qualify for the base rate or the higher rate.
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According to the tax authority, it would treat crypto transactions as “no gain, no loss” under UK capital gains laws for the acquisition or disposal of an interest in a loan agreement in exchange for the same type of asset, borrowed assets acquired at market value and similar terms with automated market makers.
“This is the right direction, driven primarily by industry feedback demonstrating that any other approach would result in a significant administrative burden on the taxpayer.” said Aave founder and CEO Stani Kulechov in a Monday X article.
Crypto candidate enters Nigel Farage by-election race
On the British political scene, reformist leader Nigel Farage will not be completely uncontested in a by-election caused by his resignation last week, amid reports that the politician was receiving contributions from billionaires linked to the crypto industry.
On Tuesday, head of community group Solana Superteam UK, Stephen Newnham, said he run as an independent candidate against Farage and others. The by-election representing Clacton is scheduled for August 13 and will be held include contestants like comedian and author Jon Harvey dressed as Count Binface, a self-described “independent space warrior” wearing a helmet shaped like a trash can.
Farage triggered the by-election with his resignation, saying he wanted the people of Clacton to judge his actions. The reformed figure would have received a donation of $6.7 million from crypto billionaire Christopher Harborne, which he described as a “reward” for the UK’s exit from the European Union and later as a “gift”, as well as other financial aid from George Cottrell, a convicted fraudster linked to a crypto casino.
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