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Posted Wed, 13 Oct 2021 22:19:15 GMT by JB H
Is there any information yet about how HMRC intend to tax rewards from lending cryptoassets to DeFi liquidity pools? Will it simply be treated as income - the same as the current treatment of rewards from staking cryptoassets ? When cryptoassets are withdrawn from liquidity pools it is extremely unlikely that the number of each asset returned will be the same as the number originally lent. Will this difference be treated as a sale or purchase of the asset, and give rise to a CGT liability ? What records need to be kept ? The rapid increase in these types of instruments and the volume of transactions within them mean that guidance is needed very quickly if individuals are to correctly record their activities to enable them to complete their 2021 self assessment forms.
Posted Fri, 15 Oct 2021 13:51:42 GMT by HMRC Admin 19

We are expecting HMRC to publish further guidance regarding DeFi and lending by December this year.

In the mean time you should keep records that would enable you to calculate either the Capital Gains on the transaction or calculate Income Tax. 

Thank you.

Posted Thu, 09 Dec 2021 12:28:37 GMT by l0wry
HMRC - Please, please, we need you to start accepting crypto payments. It is untoward to expect people to keep records of the £ value when a lot of these protocols are rewarding token holders in real-time. This is further reinforced by the volatility of some cryptocurrencies and more generally the whole Defi space. It would honestly be a full-time job.
Posted Thu, 30 Dec 2021 14:01:03 GMT by HMRC Admin 2

As this is a fast moving field, certain areas of cryptocurrency are under review and will be published as soon as decisions are made.

In the meantime, you can find all current HMRC guidance on cryptocurrency here:

Cryptoassets Manual

Thank you.

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