UK to ease tax rules on crypto lending, DeFi deposits from April 2027

The UK is set to significantly reduce the complex tax burden on cryptocurrency lending and deposits into decentralized finance (DeFi) liquidity pools starting in April 2027. The UK's HM Revenue and Customs (HMRC) announced it will introduce a "no gain, no loss" tax deferral for these transactions, meaning taxes will not be levied until the assets are fully disposed of. Previously, the mere act of lending or depositing assets, which often involves swapping them for different tokens, could trigger a capital gains tax of up to 24%, a major point of contention for investors. The measure is expected to benefit approximately 700,000 cryptocurrency users. Under the new rules, if an investor withdraws the same quantity of assets they initially deposited, the transaction will not be subject to tax. However, any additional income generated during the deposit, such as interest or other gains, will remain taxable. HMRC explained the change, stating that it is fairer to tax investors when they actually liquidate their assets.