UK crypto lending tax Rules Give UK Lenders a Tax Deferral

UK Crypto Lenders Get New Tax Deferral From HMRC

On July 13, 2026, HM Revenue & Customs (HMRC) introduced new UK crypto lending tax rules for cryptoasset loans and liquidity pools. Under these rules, certain transactions involving these arrangements will now be treated as "no gain, no loss" (NGNL). This simply means the transaction won't trigger an immediate liability bill or allow a liability loss claim at that stage. Instead, any capital gains tax is postponed until the cryptoasset is actually sold or otherwise disposed of in an economic sense. This comes as the UK has been ramping up crypto tax enforcement more broadly, including new exchange reporting rules that started in January 2026. 

Source: gov.uk

What's in the New Rules

policy paper covers three types of arrangements:

• Single Cryptoasset Lending Arrangements: Acquiring or disposing of an interest in one of these, for the same type of cryptoasset, gets treated on a no-gain, no-loss basis.

• Single Cryptoasset Borrowing Arrangements: Borrowed cryptoassets count as acquired at market value, and any collateral put up is simply disregarded for capital gains tax purposes.

• Automated Market Making Arrangements: This is the technical name for liquidity pools run through smart contracts. Deposits and withdrawals of the same quantity of cryptoasset are treated as no gain, no loss here too. Tax only kicks in if there's a difference between what went in and what came out.

Why This Matters

The measure amends the Taxation of Chargeable Gains Act 1992 and takes effect from April 6, 2027. HM Revenue & Customs says it's responding to stakeholder feedback: the earlier tax treatment, laid out in 2022 guidance was creating disproportionate admin burdens for people using lending protocols and liquidity pools. Basically, taxpayers were spending too much effort tracking gains and losses on transactions that weren't real economic events yet.

Who Does This Affect Most?

HMRC ran its own research back in 2021, and it found some groups are far more likely to hold crypto and, therefore, more likely to feel this change.

HMRC doesn't hold data on other protected characteristics, so it can't say whether other groups are affected.

Separately, HMRC doesn't expect any significant macroeconomic impact from this. Businesses and civil society organizations shouldn't feel it either, and there are no direct operational costs for HMRC in rolling the change out.

Official Details

• Published by: HM Revenue & Customs (HMRC)

• Publication date: July 13, 2026

• Effective date: April 6, 2027

• Law amended: Taxation of Chargeable Gains Act 1992

• Who is affected: Individuals and trustees using cryptoasset loans and liquidity pools

• Estimated people affected: About 700,000 individuals

According to HMRC, these rules didn't come out of nowhere. There was a call for evidence from July to August 2022, then a consultation from April to June 2023, and a summary of responses landed at Budget 2025.

Disclaimer

This article is for educational and informational purposes only and should not be considered financial or investment advice. Always conduct your own research before making investment decisions.