On 13 July 2026, HM Revenue & Customs (HMRC) published the policy paper Tax treatment of Cryptoasset Loans and Liquidity Pools, with draft legislation for the 2026/27 Finance Bill. From 6 April 2027, certain disposals into and out of qualifying cryptoasset loans and liquidity pools will be treated as no gain, no loss (NGNL) for Capital Gains Tax (CGT), amending the Taxation of Chargeable Gains Act 1992 (TCGA 1992). Depositing into a lending protocol or automated market maker will no longer, by itself, crystallise a taxable gain for individuals and trustees who meet the rules.
That is a clean break from the position HMRC spelled out in 2022 guidance, under which a technical “disposal” could arise even when you still expected to get the same type of asset back. The practical delta is simple: tax follows the economic exit, not the smart-contract hop.
Why HMRC rewrote the rule
HMRC’s 2022 cryptoassets guidance treated many DeFi deposits as disposals for CGT purposes. Stakeholder feedback, a 2022 call for evidence, and a 2023 consultation all hit the same problem: people were generating paper gains (and paperwork) when they lent tokens or joined a pool without selling into fiat.
At Budget 2025 the department published a summary of responses and sketched a fix. The 13 July 2026 package is the formal measure: align tax with economic substance so gains and losses are generally recognised only when the participant makes an economic disposal of the cryptoassets. HMRC estimates the change will affect about 700,000 individuals who use cryptoasset loan and liquidity-pool arrangements.
Status, stated plainly: the policy paper and draft legislation are public; the operative date is 6 April 2027. Until then, the existing interpretation still applies to transactions that fall under current guidance. Final costing and Finance Bill passage still sit with the usual UK fiscal process; HMRC notes the Office for Budget Responsibility will scrutinise numbers at a future fiscal event.
What the three NGNL scenarios cover
The measure is not a blanket “DeFi is tax-free” rule. It carves three scenarios for individuals and trustees (companies are outside this CGT package as drafted):
| Scenario | What it is | CGT treatment (from 6 Apr 2027) |
|---|---|---|
| Single cryptoasset lending | You have a right to receive back the same type of qualifying cryptoassets plus a return, economically like a loan | Acquiring or disposing of that interest against the same asset type is NGNL |
| Single cryptoasset borrowing | You borrow qualifying cryptoassets | Borrowed assets treated as acquired at market value when borrowed; same-type repayment treated as a disposal at that same value. Collateral under the borrowing arrangement is disregarded for CGT |
| Automated market making (AMM) | Smart-contract pool where your interest represents rights to two or more types of qualifying cryptoassets | Entry against matching invested types is NGNL. Exit is NGNL to the extent you receive the same quantity of each original invested type; any shortfall or surplus is a gain or loss by reference to that difference |
Plain language:
Lending (e.g. deposit ETH into a single-asset lending market). Moving the same asset type in and out of a qualifying loan arrangement should not open a CGT calculation on the hop. When you later sell, swap for a different asset, or otherwise make an economic disposal, CGT is calculated then, with basis that has not been reset by the deposit.
Borrowing. The paper is careful here: borrowing is not free of tax consequence forever. You are treated as acquiring the borrowed coins at market value; when you return the same type, you dispose at that acquisition value. Posting collateral is ignored for CGT so the pledge itself does not fire a disposal.
Liquidity pools. Providing two tokens to an AMM (classic constant-product pool) is NGNL on entry when you put in the types the interest tracks. On withdrawal, only the matched quantity of each original type stays NGNL; impermanent-loss shortfalls or extra tokens you did not put in can create a gain or loss on that difference. That is the technical heart of the reform for LP users, and it is why “same quantity” language matters more than the headline “no tax on LPs.”
What still looks taxable under ordinary principles (and is not magically deferred by NGNL):
- Selling crypto for sterling, another fiat currency, or a different cryptoasset outside a qualifying arrangement
- Spending crypto on goods or services
- Swaps that are true economic disposals of one asset for another
- Income-character returns (interest-like rewards, trading as a trade) that fall under income tax rather than CGT. This measure is a CGT deferral design, not a rewrite of income-tax characterisation
HMRC’s own contact line for questions is digitalassets@hmrc.gov.uk. Anyone with a live position should read the draft clauses and, if needed, take advice from a UK tax professional; this article is policy analysis, not tax advice.
How this sits next to LatAm reporting stacks
Latin America is not rewriting its codes to copy HMRC’s NGNL schedule. The useful comparison is what each system taxes and reports, and when.
Brazil has spent 2025–2026 building a reporting-first stack: DeCripto (mandatory crypto-asset reporting for residents), FX-side virtual-asset rules under the BCB resolution package, and VASP authorisation clocks that decide which platforms stay on bank rails. Brazilian rules focus heavily on who must report what to Receita Federal and the BCB, not on a dedicated NGNL carve-out for Aave-style deposits. A São Paulo user who also has UK tax residence still has to map both systems; the UK reform does not silence DeCripto.
Argentina and Mexico still route most crypto gains through general income and capital regimes rather than a DeFi-specific CGT deferral statute. Policy energy in the region has gone to VASP registration, AML, and (in Brazil) stablecoin/FX perimeter rules (the intermediary layer), while self-custody and pure protocol interaction often sit outside licensing even when tax reporting still bites.
Why a UK CGT rewrite still matters on LatAm desks:
Dual-residence and diaspora. Large LatAm communities in the UK, plus UK persons with LatAm business, will file under HMRC rules while their wallets talk to Brazilian and Argentine rails. A cleaner UK treatment of protocol deposits reduces double-paperwork on the UK side without changing Receita or AFIP obligations.
Template language for “economic disposal.” When LatAm finance ministries eventually write DeFi guidance, HMRC’s three-scenario structure (loan / borrow / AMM, with quantity-matched exits) is a concrete model they can accept, modify, or reject. It is more usable than a slogan.
Intermediary vs protocol. Brazil’s SPSAV regime polices service providers; HMRC’s NGNL polices how individuals account for protocol hops. Users who prefer self-custody still need tax records; they just get fewer forced “disposals” under UK CGT when the hop is a qualifying loan or pool entry.
None of that is a reason to treat NGNL as a reason to leverage more or chase yield. It is a reason to keep clean records of cost basis, dates, and whether a transaction is a true exit or a qualifying arrangement.
What to do before 6 April 2027
If you are in scope as a UK individual or trustee:
- Keep basis history. NGNL defers recognition; it does not erase the need to know what you paid. Export exchange and wallet history now so April 2027 does not become an archaeology project.
- Separate income from capital. Rewards that look like interest or trading profits may still be income-tax events under existing principles. NGNL is not a shield for every token that appears in a wallet.
- Watch the Finance Bill text. Draft legislation can tighten definitions of “qualifying cryptoassets,” “same type,” and arrangement boundaries before Royal Assent. Build process on the published paper; lock product and tax software assumptions to the final Act.
- Until 6 April 2027, assume the old disposal analysis still applies for transactions HMRC already treated as disposals. Do not backdate NGNL treatment in a return unless HMRC or final legislation says you may.
For builders and accountants serving LatAm users with UK exposure: document which legs are UK-source CGT events, which are foreign reporting events, and which are pure self-custody moves that never touch a VASP. The UK change reduces noise on protocol deposits; it does not replace Brazil’s reporting stack or any local capital-gains rules.
Takeaway
HMRC’s 13 July 2026 cryptoasset loans and liquidity pools measure introduces no gain, no loss CGT treatment for three defined arrangements from 6 April 2027, amending TCGA 1992. The policy goal is fairness with economics: tax when you really dispose, not when you park the same asset type in a loan or AMM. Roughly 700,000 individuals sit in HMRC’s impact estimate.
For LatAm readers, the direct statute is UK law; the portable lesson is the design choice. Supervisors in the region are tightening intermediary licensing and reporting; HMRC just cleaned up individual CGT friction on DeFi plumbing. If both trends continue, the rational user habit is unchanged: know your residency and filing duties, keep basis data, prefer wallets you control for assets you are not actively trading, and treat every “no tax on deposit” headline as a narrow statutory test, not a free pass.
This is analysis of a published UK tax measure, not personal tax or investment advice.
