UK Plans to Adjust Capital Gains Tax Treatment for Crypto Asset Loans and Liquidity Pools from 2027

TechFlow news, July 14, HM Revenue and Customs released a policy document proposing that from April 6, 2027, a "no gain no loss" treatment will apply to certain cryptoasset lending and liquidity pool arrangements involving individuals and trusts, meaning Capital Gains Tax will be deferred until an economic disposal occurs.

The measure aims to align tax treatment more closely with the economic substance of relevant arrangements and reduce the administrative burden imposed by current rules. The document also clarifies tax treatment rules for three scenarios: single cryptoasset lending arrangements, single cryptoasset borrowing arrangements, and automated market maker arrangements. Approximately 700,000 individuals are expected to be affected.