HMRC hits snooze on crypto tax until 2027 — lenders and LPs get a deferral do-over 🫡

HM Revenue and Customs said Monday that, starting April 6, 2027, it will apply a "no gain, no loss" treatment to certain disposals tied to cryptocurrency lending and liquidity pools, effectively deferring UK capital gains tax obligations until an "economic disposal." The tax authority said the change "will support fairness in the tax system" by aligning the treatment "more closely with the economics of these arrangements," ensuring gains and losses are generally recognized only when a participant economically disposes of the underlying cryptoassets. The move supersedes HMRC's 2022 guidance on crypto liquidity pools and lending and follows a consultation period.

Under current UK law for the 2025-2026 tax year, taxpayers pay between 18% and 24% in capital gains tax on crypto transactions, depending on whether they fall within basic-rate or higher-rate bands. HMRC said the "no gain, no loss" approach would apply to the acquisition or disposal of an interest in a lending arrangement in exchange for the same type of asset, to borrowed assets acquired at market value, and to similar conditions involving automated market makers. The measure is expected to affect about 700,000 individuals and trustees.

Aave founder and CEO Stani Kulechov welcomed the policy shift on Monday via X, writing: "This is the right direction, mainly driven by the industry feedback demonstrating that any other approach would cause significant admin burden for the tax payer."

In a separate UK political development, Stephen Newnham, the leader of the Solana community group Superteam UK, said Tuesday he will run as an independent candidate in the upcoming by-election for the Clacton seat. The contest, scheduled for Aug. 13, was triggered by the resignation of Reform leader Nigel Farage, who said he wanted constituents to judge his actions. Reports cited a $6.7 million donation to Farage from crypto billionaire Christopher Harborne — described variously by Farage as a "reward" for Brexit and later a "gift" — along with financial assistance from George Cottrell, a convicted fraudster linked to a crypto casino. The ballot will also feature comedian and author Jon Harvey running in costume as Count Binface, a self-described "independent space warrior."