{"id":60835,"date":"2025-11-28T08:02:53","date_gmt":"2025-11-28T08:02:53","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=60835"},"modified":"2025-11-28T08:02:53","modified_gmt":"2025-11-28T08:02:53","slug":"uk-crypto-tax-update-new-defi-rules-and-no-gain-no-loss-policy-explained","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=60835","title":{"rendered":"UK Crypto Tax Update: New DeFi Rules and \u201cNo Gain, No Loss\u201d Policy Explained"},"content":{"rendered":"<div>\n<p><span style=\"font-weight: 400\">\u00a0The United Kingdom has signalled a major change in how it plans to tax DeFi, backing a \u201cno gain, no loss\u201d idea that could end so-called dry tax bills for everyday users.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">The government, through HM Revenue &amp; Customs, <\/span><span style=\"font-weight: 400\">says<\/span><span style=\"font-weight: 400\"> it is developing rules to treat many DeFi loans and liquidity-pool moves on a no-gain\/no-loss basis.\u00a0<\/span><span style=\"font-weight: 400\">This would delay capital gains tax until there is a real sale or swap, not just when tokens move in and out of a protocol.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">The proposal was flagged alongside <a class=\"general-link\" href=\"https:\/\/assets.publishing.service.gov.uk\/media\/6926eb222a37784b16ecf526\/Final_print_HMT_Budget_2025_TEXT_PRINT_NEW.pdf\" target=\"_blank\" rel=\"nofollow noopener\">Wednesday\u2019s Budget<\/a> on 26 November and set out in a consultation outcome published this week.<\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\"><img decoding=\"async\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/16.0.1\/72x72\/1f6a8.png\" alt=\"\ud83d\udea8\" class=\"wp-smiley\" style=\"height: 1em; max-height: 1em;\"> BREAKING: <img decoding=\"async\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/16.0.1\/72x72\/1f1ec-1f1e7.png\" alt=\"\ud83c\uddec\ud83c\udde7\" class=\"wp-smiley\" style=\"height: 1em; max-height: 1em;\">UK proposes \u201cNo-Gain, No-Loss\u201d tax rule for DeFi \u2013 deposits into lending or liquidity pools won\u2019t trigger capital gains tax until actual disposal. <\/p>\n<p>Huge win for DeFi users in the UK. <img decoding=\"async\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/16.0.1\/72x72\/1f525.png\" alt=\"\ud83d\udd25\" class=\"wp-smiley\" style=\"height: 1em; max-height: 1em;\"> <a href=\"https:\/\/t.co\/QDpb2kR8vr\" rel=\"nofollow\" target=\"_blank\">pic.twitter.com\/QDpb2kR8vr<\/a><\/p>\n<p>\u2014 Real World Asset Watchlist (@RWAwatchlist_) <a href=\"https:\/\/twitter.com\/RWAwatchlist_\/status\/1994136356893937951?ref_src=twsrc%5Etfw\" rel=\"nofollow\" target=\"_blank\">November 27, 2025<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><b>DISCOVER:<\/b><a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/new-cryptocurrency\/\" target=\"_blank\" rel=\"nofollow noopener sponsored\"> <b>Best New Cryptocurrencies to Invest in 2025<\/b><\/a><\/p>\n<h2><b>Explaining HMRC\u2019s \u201cNo Gain, No Loss\u201d Plan<\/b><\/h2>\n<p><span style=\"font-weight: 400\">Officials <\/span><a class=\"general-link\" href=\"https:\/\/www.gov.uk\/government\/consultations\/the-taxation-of-decentralised-finance-involving-the-lending-and-staking-of-cryptoassets\/outcome\/the-taxation-of-decentralised-finance-defi-involving-the-lending-and-staking-of-cryptoassets-summary-of-responses\" target=\"_blank\" rel=\"noopener nofollow\"><span style=\"font-weight: 400\">say<\/span><\/a><span style=\"font-weight: 400\"> the goal is to align tax with how DeFi actually works and cut down on reporting that can hit users even when nothing has really been \u201csold.\u201d Currently<\/span><span style=\"font-weight: 400\">, people can face tax just for depositing tokens and later withdrawing the same ones.<\/span><\/p>\n<p><span style=\"font-weight: 400\">HMRC says it is developing an approach that treats certain disposals as no gain, no loss, and it may extend this approach to automated market makers as well. <\/span><span style=\"font-weight: 400\">The department adds that it will keep testing the case for changing the law. For now, this is a plan in motion, not a rule on the books.<\/span><\/p>\n<p><span style=\"font-weight: 400\">HMRC\u2019s guidance breaks DeFi usage into three areas: single-token setups, crypto loans, and automated market makers, also known as AMMs.<\/span><\/p>\n<p><span style=\"font-weight: 400\">If you deposit and later withdraw the same single token, HMRC would still treat both actions as disposals. But they would fall under the \u201cno gain, no loss\u201d rule. That means there is no tax to pay at that moment.\u00a0<\/span><span style=\"font-weight: 400\">You only work out any profit or loss later, when you actually sell the tokens you received back.<\/span><\/p>\n<p><span style=\"font-weight: 400\">When you use crypto as collateral to borrow, HMRC takes a lighter approach. Taking out the loan and locking up your tokens would not trigger capital gains tax.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">The tax only comes into play if you sell the borrowed crypto and later buy it back to repay the loan. In that case, HMRC would calculate any gain or loss based on that buy-and-sell cycle.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For AMMs and other pools that involve more than one token, deposits would also be treated under the no gain, no loss rule. But things change when you exit. The tax position then depends on what you get back from the pool, and whether it matches what you originally put in.<\/span><\/p>\n<p><b>DISCOVER:<\/b><a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/new-binance-listings\/\" target=\"_blank\" rel=\"nofollow noopener sponsored\"> <b>16+ New and Upcoming Binance Listings in 2025<\/b><\/a><\/p>\n<h2><b>How is HMRC Handling Crypto Loans and Liquidity Pools Going Forward?<\/b><\/h2>\n<p><span style=\"font-weight: 400\">If users exit a pool with more or fewer tokens than they put in, the difference would count as a taxable gain or loss.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">If users receive the same number back, HMRC treats the exit as \u201cno gain, no loss,\u201d and no tax is due at that point.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Industry participants told HMRC the current system is heavy on paperwork and often taxes outcomes that do not match what actually happened economically. Stakeholders submitted a total of 32 formal responses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Most backed changes that would make the rules easier to follow and closer to how DeFi works in practice. HMRC said feedback during the process was \u201cgenerally positive.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400\">The <\/span><a class=\"general-link\" href=\"https:\/\/assets.publishing.service.gov.uk\/media\/6928683d345e31ab14ecf682\/Final_print_HMT_Budget_2025_TEXT_PRINT_NEW.pdf\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400\">Budget papers<\/span><\/a><span style=\"font-weight: 400\"> confirm the government has published a summary of the DeFi tax consultation.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">But they stop short of turning the \u201cno gain, no loss\u201d model into law. HMRC says it will build the new approach for individuals first, then look at whether to extend it to companies later.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">The guidance also updates the wording to \u201ccryptoasset loans and liquidity pools,\u201d which brings both DeFi and centralised platforms under the same heading.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The push comes as enforcement steps up and many retail investors still struggle to tell when a crypto-to-crypto trade creates a tax bill.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">HMRC has <\/span><a class=\"general-link\" href=\"https:\/\/www.ft.com\/content\/508ae3e5-5529-4851-ada4-04744716f116\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400\">doubled<\/span><\/a><span style=\"font-weight: 400\"> the number of warning letters sent to suspected non-payers to about 65,000 in the 2024\u201325 tax year, a sign the agency wants clearer rules that people can actually follow.<\/span><\/p>\n<p><b>DISCOVER:<\/b><a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/next-1000x-crypto\/\" target=\"_blank\" rel=\"nofollow noopener sponsored\"> <b>Next 1000X Crypto \u2013 Here\u2019s 10+ Crypto Tokens That Can Hit 1000x This Year<\/b><\/a><\/p>\n<p>The post <a href=\"https:\/\/99bitcoins.com\/news\/bitcoin-btc\/uk-crypto-tax-update-new-defi-rules-and-no-gain-no-loss-policy-explained\/\">UK Crypto Tax Update: New DeFi Rules and \u201cNo Gain, No Loss\u201d Policy Explained<\/a> appeared first on <a href=\"https:\/\/99bitcoins.com\/\">99Bitcoins<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0The United Kingdom has signalled a major change in how it plans to tax DeFi, backing a \u201cno gain, no loss\u201d idea that could end so-called dry tax bills for everyday users.\u00a0 The government, through HM Revenue &amp; Customs, says it is developing rules to treat many DeFi loans and liquidity-pool moves on a no-gain\/no-loss [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-60835","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/60835","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60835"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/60835\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}