The UK introduces a new tax framework for DeFi users, deferring capital gains taxes on crypto lending and liquidity pool until tokens are sold. HMRC proposes a “no gain, no loss” approach covering various DeFi transactions, with gains or losses calculated upon redemption. Current capital gains tax rates in the UK range from 18% to 32%.

The tax framework is seen as a positive step for UK crypto regulation by industry experts. Sian Morton from Relay protocol believes it aligns tax treatment with the economic reality of DeFi interactions. Maria Riivari from Aave sees it providing clarity that DeFi transactions don’t trigger tax until tokens are sold, advising other countries to consider this approach.

Aave CEO Stani Kulechov hails the tax proposal as a major win for UK DeFi users seeking to borrow stablecoins against crypto collateral. However, the proposal is not finalized yet, with HMRC engaging with stakeholders to evaluate the potential approach and the need for legislative changes in the taxation of crypto asset loans and liquidity pools. 32 formal written responses were submitted during the initial consultation from various individuals, businesses, and representative bodies.

Read more at Cointelegraph: UK Floats ’No Gain, No Loss’ Taxes on DeFi Transactions