HMRC has instigated a consultation seeking views on modifying the tax treatment of decentralised finance (DeFi) lending and staking. The proposed scope of its changes considers the use of cryptoassets in DeFi transactions that would no longer be treated as giving rise to a ‘disposal’ for tax purposes. Instead, a tax disposal would arise when the cryptoassets are economically disposed of in a non-DeFi transaction.

UK Finance has offered a short response to the proposals put forward and will seek to work closely with both HMRC and HMT to ensure there is a degree of regulatory alignment across their different approaches to what is a fast moving, dynamic and multi-faceted area.”