Overview
- HMRC’s consultation outcome signals support for treating many DeFi deposits and staking on a no gain, no loss basis, delaying capital gains tax until sale, swap, or redemption.
- The approach explicitly contemplates automated market makers and multi‑token liquidity pools, with gains or losses crystallizing based on what users receive on exit versus what they contributed.
- Officials dropped an earlier idea to mirror repo and stock‑lending rules after criticism that prior guidance created dry tax charges and heavy administrative burdens.
- Industry feedback was broadly supportive, with 32 formal responses from stakeholders including Aave, Binance, a16z and CryptoUK, and Aave’s Stani Kulechov calling the shift a major win for UK DeFi users.
- The 2025 Budget left headline crypto taxes unchanged but extends income‑tax threshold freezes, keeps CGT allowances low, and introduces expanded exchange reporting from 2026 as HMRC steps up enforcement with about 65,000 warning letters in 2024–25.