Daily Crypto Briefs 
LONDON, July 15, 2026
HM Revenue & Customs has published draft rules that would defer UK Capital Gains Tax when qualifying cryptoassets are placed into certain loans or automated-market-maker liquidity pools, a change proposed for April 6, 2027 that the agency says could affect about 700,000 individuals and trustees.
The proposal would not erase tax on DeFi activity. Instead, it would generally move the tax point from a qualifying deposit or return of the same cryptoasset to a later economic disposal, while putting conditions around the arrangements that can use the treatment.
Bitcoin traded at about $64,781 on July 15, up roughly 8% from its $59,968 close on July 1, according to CoinGecko. The data provider put BTC’s market value near $1.30 trillion and 24-hour volume near $32.5 billion, while HMRC’s estimate of 700,000 affected users illustrates how closely a tax technicality can reach into an active DeFi market.
In its policy paper, HMRC said certain disposals would be treated on a “no gain, no loss” basis, which effectively defers Capital Gains Tax until an economic disposal. The paper says the objective is to align the tax treatment more closely with the economics of these arrangements.
Bitcoin
BTCThe change follows HMRC’s 2022 guidance and a 2023 consultation, after which the agency said stakeholders had identified disproportionate administrative burdens. It arrives days after the FCA set a broader 2027 authorization timetable for crypto firms, but it is a separate tax proposal rather than a new conduct rule for a protocol or exchange.
HMRC’s DeFi Tax Proposal Starts in 2027
The announced effective date is April 6, 2027. The government included the measure in its Finance Bill 2026-27 draft-legislation collection, so the text is not yet enacted law.
That distinction is important for tax reporting before the start date. The current rules remain in force, and the draft cannot settle how every protocol, wallet flow or user record will be treated after the legislation passes.
The proposal applies to individuals and trustees, not companies. It addresses three defined situations: single-cryptoasset lending, single-cryptoasset borrowing and automated market making, the smart-contract model commonly used for a liquidity pool.
HMRC says a qualifying lending arrangement must be economically equivalent to lending, genuine and commercial, and meet its loss-risk and availability tests. A user simply sending a token to an address does not, by itself, establish that each condition has been met.
For borrowers, the draft has separate mechanics. It treats borrowed qualifying cryptoassets as acquired at market value and, when assets of the same type are returned, generally treats them as disposed of for that acquisition value. The treatment is not a blanket safe harbor for every DeFi trade or collateral move.
Which Crypto Loans and Liquidity Pools Qualify
The draft defines an automated market-making arrangement as one using a smart contract and an automated protocol to price assets by reference to the pool’s total holdings. It requires at least two cryptoasset types and says the arrangement must be widely available, rather than a private bilateral structure.
For a qualifying AMM deposit, the proposed rule would prevent an immediate gain or loss on the qualifying cryptoassets contributed. On exit, the draft similarly aims to defer the gain or loss on qualifying assets returned up to the relevant amount, while leaving any remaining consideration to the usual tax analysis.
That framework is narrower than the shorthand claim that “DeFi deposits are no longer taxable.” The accessible draft legislation excludes securities and tokenized assets from the definition of qualifying cryptoassets, subject to specific exceptions. It also imposes genuine-commercial-arrangement and availability conditions.
Returns still require attention. The policy paper says the change is designed to defer tax until an economic disposal, not to turn a lending return, a swap into a different asset, or an impermanent-loss outcome into an ignored event. HMRC has not published a protocol-by-protocol eligibility list.
The practical impact is clearest for users of familiar lending and pool designs, such as the kind of DeFi markets that helped Aave’s Monad deployment surpass $100 million in deposits. A protocol’s branding does not decide eligibility, however. The transaction terms and the statutory definitions would do that.
UK Crypto Tax Change Still Needs Legislation
The government says the reform should make the framework easier to understand and better aligned with economic substance. It estimates the measure affects about 700,000 people, but it has not published a monetary estimate of deferred tax or a protocol-level breakdown of that population.
For users, the likely benefit is less tax friction when the economic exposure remains to the same qualifying cryptoasset. The remaining risk is recordkeeping: lenders and liquidity providers will still need to identify the assets contributed, assets returned, returns received and the point at which an economic disposal occurs.
The proposal also sits alongside a wider UK effort to regulate crypto activity. The Bank of England’s systemic-stablecoin framework and the FCA’s rules address different parts of the market, while HMRC’s text is confined to Capital Gains Tax treatment for defined arrangements.
Crypto sentiment remained cautious even as bitcoin recovered. Alternative.me showed a reading of 25, classified as Extreme Fear, on July 15.
Fear & Greed Index
July 15, 2026The next checkpoint is legislative rather than on-chain: whether the draft is carried into and approved through the Finance Bill process. Until then, the proposal gives UK DeFi users a clearer direction of travel, but not a replacement for current rules or transaction-specific tax advice.
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Primary sources and further reading
| Source | Title |
|---|---|
| | HMRC: Cryptoasset loans and liquidity pools policy paper |
| | HMRC: Tax treatment of Cryptoasset Loans and Liquidity Pools |
| | HMRC: Draft legislation, accessible version |
| | GOV.UK: Finance Bill 2026-27 draft legislation collection |
| | CoinGecko: Bitcoin price and market data |
| | Alternative.me: Crypto Fear and Greed Index |
Fact-checked by: Daily Crypto Briefs Fact-Check Desk
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Frequently Asked Questions
Will the UK DeFi tax proposal make crypto lending tax-free?
No. The draft would defer Capital Gains Tax on certain qualifying transfers until an economic disposal. It does not exempt returns or gains on a later taxable sale.
When would HMRC's crypto loan and liquidity-pool rules start?
HMRC's policy paper says the measure would take effect from April 6, 2027, subject to the draft legislation completing the Finance Bill process.
Which DeFi activity is included in the UK draft rules?
The draft addresses qualifying single-cryptoasset lending, single-cryptoasset borrowing and automated market making arrangements. Specific eligibility conditions apply.
Does the HMRC proposal cover tokenized securities?
Generally no. The draft defines qualifying cryptoassets to exclude securities and tokenized assets, subject to stated exceptions.
Who could be affected by the UK DeFi tax change?
HMRC estimates the measure would affect about 700,000 individuals and trustees who use cryptoasset loans and liquidity pools.