@999eth
UK Proposes "No Gain, No Loss" Tax Rule for DeFi
The UK government is preparing a new tax framework that could significantly benefit Decentralized Finance (DeFi) users.
In a proposal published this week, His Majesty's Revenue and Customs (HMRC) expressed support for a "No Gain, No Loss" (NGNL) mechanism for digital asset lending and liquidity provision activities.
Under current regulations, depositing assets into a DeFi protocol, whether to earn a return or to provide collateral, could be considered a disposal event and trigger Capital Gains Tax.
The NGNL model would resolve this issue by deferring tax until the user has an actual economic disposal. This would alleviate the tax burden and align more closely with how DeFi operates in practice.
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