The short answer
The UK's proposed 6 April 2027 CGT rules for cryptoasset loans, borrowing and automated market makers, and what remains subject to legislation.
The UK government has proposed new Capital Gains Tax rules for certain cryptoasset loans, borrowing arrangements and automated market makers. The proposed measure is intended to defer CGT until an economic disposal of the cryptoasset, rather than taxing a transfer that may leave the participant with the same economic exposure.
The proposed operative date is 6 April 2027, but this page describes draft policy and draft legislation published for Finance Bill 2026–27. It is not current law and should not be used to reverse a 2026/27 tax position without transaction-specific advice.
The proposed framework is separate from the existing UK cryptoasset rules and from the proposed stablecoin changes. Read the general cryptoasset tax guide for current record-keeping and disposal concepts, and the stablecoin tax guide for the separate stablecoin proposal.
Proposed no-gain-no-loss treatment
Proposed from 6 April 2027
Keep the arrangement evidence
What the proposal is designed to change
HMRC's policy paper says the proposal will defer CGT in certain circumstances until an economic disposal of the cryptoasset. The policy follows concerns that the 2022 HMRC interpretation of existing law could treat some transfers as disposals even when the participant retained substantially the same economic exposure.
The proposed approach is intended to align the tax point more closely with the economics of the arrangement. It does not mean that all loans, staking, yield farming or DeFi activity will automatically be tax-neutral. The statutory definitions and conditions will determine whether a particular transaction is inside the new framework.
The draft measure is aimed at certain disposals by individuals and trustees. A company, partnership, fund or platform may need a different analysis under Corporation Tax, accounting and financial-services rules.
Three arrangements named in the draft measure
Single cryptoasset lending arrangements
A lender transfers a cryptoasset to a borrower under an arrangement requiring the borrower to return the same type and quantity of cryptoasset, subject to the proposed conditions. The lender may also receive a return or other right under the agreement.
The key evidence is the identity of the asset, the obligation to return it, the term and the treatment of any return. A transfer described commercially as a loan will not by itself establish that the statutory definition is met.
Single cryptoasset borrowing arrangements
A borrower receives a cryptoasset and has an obligation to return the same type and quantity. The proposed rules address the CGT treatment of the borrowing and the return obligation, but they do not remove the need to track later disposals, collateral, fees or other tokens received.
Do not assume that selling borrowed tokens, replacing collateral, paying a return or closing the loan is one single tax event. Keep a transaction timeline that separates each transfer and economic disposal.
Automated market maker arrangements
An automated market maker can involve depositing at least two types of cryptoasset into a liquidity pool so that the smart contract facilitates trading. The liquidity provider can receive a pool token, a right to withdraw assets or a return generated by the arrangement.
The proposal is intended to address qualifying automated market maker arrangements, but the practical classification can be fact-sensitive. Pool rules, token rights, partial withdrawals, swaps, fees, rewards and changes in token quantities should be recorded separately.
What no-gain-no-loss means here
In a no-gain-no-loss treatment, the relevant transfer is not treated as creating an immediate chargeable gain or allowable loss in the same way as an ordinary disposal. The tax consequence is deferred and generally follows the original economic exposure into a later disposal, subject to the final legislation.
This does not mean:
- that all gains are permanently exempt;
- that a return or reward is automatically capital rather than income;
- that fees and collateral movements can be ignored;
- that every pool token is treated identically; or
- that the proposed rules apply to a transaction completed before the commencement date.
The final base-cost, matching and anti-avoidance mechanics must be read from the enacted legislation and updated HMRC guidance.
Do not apply the proposal retrospectively
The proposed 6 April 2027 start date does not rewrite the current 2026/27 rules. Keep existing records and analyse earlier transactions under the law and HMRC guidance that applied at the relevant time unless final legislation provides otherwise.
Current law versus the proposed 2027 framework
| Question | Current position before commencement | Proposed framework |
|---|---|---|
| Transfer to a borrower or pool | May be a disposal depending on the facts and existing rules | Certain qualifying arrangements could receive no-gain-no-loss treatment |
| Economic disposal | CGT analysis follows the current law and facts | Intended to be the later tax point for qualifying arrangements |
| Rewards and fees | Need separate income/CGT analysis | Not automatically converted into capital or ignored |
| Companies | Corporation Tax rules may apply | Draft measure is principally framed for individuals and trustees |
| Commencement | Current law applies until changed | Proposed from 6 April 2027, subject to final legislation |
This table is a decision map, not a substitute for the legislation. The proposal may change during parliamentary passage or technical consultation.
Records to keep now
For each loan, borrowing or liquidity-pool position, retain:
- the platform or smart-contract address;
- the token type and quantity transferred;
- the date and wallet from which each transfer was made;
- the loan, pool or protocol terms;
- the obligation to return the same asset, if any;
- collateral, margin and liquidation events;
- pool tokens, replacement tokens or withdrawal rights received;
- rewards, fees and other consideration; and
- the market value and transaction records at every disposal or withdrawal.
The proposed rules may reduce a future immediate CGT charge for a qualifying arrangement, but they will not remove the need to prove what happened. Incomplete wallet history can make it difficult to establish the original acquisition cost and the later economic disposal.
Questions to ask before relying on the proposal
Is the arrangement really a single-asset loan?
Check whether the borrower must return the same type and quantity of token. A multi-token exchange, wrapped-token route, collateral swap or token substitution may require separate analysis.
Is the pool an automated market maker?
Identify how the protocol uses the deposited assets, whether participants trade independently through the smart contract, and what rights the liquidity provider receives. Do not rely on the word “pool” alone.
Has there been an economic disposal?
Selling, exchanging, withdrawing a different quantity of tokens, transferring rights to another person or closing a position can have consequences even if the original deposit is intended to be covered.
Are rewards income or part of the capital position?
The draft CGT framework does not answer every Income Tax question. Analyse staking-like returns, fees, lending rewards and other receipts separately.
Does the taxpayer fall within scope?
Confirm whether the taxpayer is an individual or trustee and whether another tax regime applies. Company and platform positions should not be copied from an individual example.
Interaction with stablecoins and current crypto rules
HMRC is developing the cryptoasset-loan proposal alongside the separate stablecoin tax measure. A loan or liquidity-pool arrangement may use a stablecoin, but the stablecoin rules and the loan/pool rules are not interchangeable.
For current transactions, continue to use the existing disposal, pooling, valuation and record-keeping framework unless and until the final rules change it. A policy paper is evidence of intended direction, not a filing instruction.
Draft conditions that can change the outcome
The draft legislation is narrower than a commercial platform's description of its product. It applies for CGT purposes where a person other than a company acquires or disposes of qualifying cryptoassets under one of the specified arrangements. A qualifying cryptoasset is generally one that is not a security or a tokenised asset under the draft definitions. A token that represents rights in another asset may therefore need a different analysis even if it is traded on the same platform as an ordinary token.
For a single cryptoasset lending arrangement, the draft requires more than a right to receive a token later. The arrangement must be genuine and commercial, have a low risk that the entitlement cannot be realised, and satisfy either an unconnected-parties condition or a widely-available condition. The right must relate to the relevant number of cryptoassets of the same type and a return. A private, bespoke arrangement with a connected counterparty should not be treated as qualifying merely because the agreement uses the word “loan”.
The borrowing rules also have a different mechanic from a lender's NGNL treatment. The draft generally treats the borrower as acquiring borrowed qualifying cryptoassets at market value when transferred and as disposing of the same type when returned for the acquisition value. Collateral provided under the borrowing arrangement is disregarded for CGT under the draft, but a sale, use, liquidation or separate collateral transaction may still have its own tax and legal consequences. Record the collateral separately from the borrowed token and identify any event that ends or changes the obligation.
Automated market making has a quantity limit. If a liquidity provider disposes of an interest and receives the same type of cryptoassets, the draft treats the matching quantity up to the amount originally invested on an NGNL basis. If the provider receives more or less than that original quantity, the excess or shortfall can produce a gain or loss by reference to the difference. A withdrawal that contains fees, rewards, rebalancing gains or a different token mix therefore needs a token-by-token schedule.
The draft also contains special treatment for eligible stablecoins in some provisions. Do not assume that a stablecoin used as collateral, invested asset or returned asset is automatically treated like a non-stablecoin. Check the final statutory definitions, the date of the arrangement and the relevant chapter of the enacted rules. A stablecoin policy can interact with, but does not replace, the loan and AMM rules.
Transition file for 6 April 2027
Prepare a transition file before the proposed commencement date with the acquisition pool for each token, open loan and pool position, original quantities, current collateral, accrued returns, wallet and contract identifiers, and any disposal already reported in 2026/27. Save the policy and draft legislation versions used for the review. If the proposal is enacted with changes, compare each open position against the final definitions rather than applying a blanket “grandfathering” assumption.
A position that began before 6 April 2027 may have events both before and after the proposed start date. Split the timeline at the commencement date, identify the law applying to each event and preserve the original market values. Do not amend an earlier return merely because a future no-gain-no-loss rule is expected. If the same tokens are pooled or lent through multiple protocols, maintain separate schedules so that a later withdrawal can be matched to the correct arrangement.
Frequently Asked Questions
Are cryptoasset loans tax-free from April 2027?
When are the new cryptoasset loan rules expected to start?
Do the proposed rules cover liquidity pools?
Does the proposal cover companies?
Should I change my 2026/27 crypto tax return now?
Are cryptoasset loans under the proposed rules tax-free?
Does a liquidity pool automatically qualify for the proposed 2027 rules?
What happens if I withdraw different tokens from a liquidity pool?
Do the proposed cryptoasset-loan rules cover companies?
Should I keep records for crypto loans made before 6 April 2027?
Before reporting a live position, check HMRC's policy paper, draft legislation and current Cryptoassets Manual. The proposal can change before enactment.
Official sources
Related Guides
ISA vs GIA UK 2026/27 — Which Account Fits?
Compare a UK ISA with a General Investment Account: tax on dividends and gains, the £20,000 limit, bed-and-ISA planning, access and practical trade-offs.
Stablecoin Tax UK 2027: Planned CGT and Income Tax Changes
UK stablecoin tax changes planned for April 2027: eligible disposals, savings income, company treatment, transition rules and what remains subject to legislation.
Bed and ISA 2026/27 | How to Shelter Your Gains Tax-Free
Bed and ISA in 2026/27: sell investments outside an ISA, manage CGT and repurchase inside a Stocks & Shares ISA, with 30-day rule examples.
Review notes and assumptions
Reviewed
2026-09-22
Assumptions
- This guide describes the Finance Bill 2026-27 draft measure published on 13 July 2026; it is not a statement of final law.
- The proposed rules concern certain individuals and trustees and do not automatically answer Income Tax, Corporation Tax, VAT, reporting or financial-regulation questions.
- The final legislation, commencement wording, definitions and HMRC guidance must be checked before the 2027/28 tax year or any transaction is reported.