HMRC has launched a consultation on the taxation of decentralised finance (‘DeFi’) cryptoasset lending and staking transactions. Under consultation is a legislative change to disregard the disposal of beneficial ownership when tokens are lent or staked in a DeFi transaction for tax purposes. Instead, a chargeable disposal would only arise when the tokens are economically disposed of. HMRC’s primary aim is to better align the tax treatment and underlying economic substance of these transactions. This is welcomed, but is HMRC missing a trick by legislating only to deal with these specific transactions and not to answer some of the more fundamental questions on the tax aspects of cryptoassets? The consultation runs for eight weeks from 27 April 2023 to 22 June 2023.
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HMRC has launched a consultation on the taxation of decentralised finance (‘DeFi’) cryptoasset lending and staking transactions. Under consultation is a legislative change to disregard the disposal of beneficial ownership when tokens are lent or staked in a DeFi transaction for tax purposes. Instead, a chargeable disposal would only arise when the tokens are economically disposed of. HMRC’s primary aim is to better align the tax treatment and underlying economic substance of these transactions. This is welcomed, but is HMRC missing a trick by legislating only to deal with these specific transactions and not to answer some of the more fundamental questions on the tax aspects of cryptoassets? The consultation runs for eight weeks from 27 April 2023 to 22 June 2023.
If you are not a subscriber, subscribe now to read this content.
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