The United Kingdom has put forward a tax change that targets lending and staking in decentralised finance. The change brings in a “no gain, no loss” rule and will apply to company accounts that start on or after 1 January 2027. The goal is to make the tax point match what users actually gain or lose and to cut the paperwork and the “dry tax bills” that have until now hit internal protocol moves.
The core measure is NGNL – it freezes any capital gain or loss until the original asset is truly sold or swapped. Before this plan, moving crypto into a staking contract or a liquidity pool counted as a disposal for Capital Gains Tax, which meant tax was due on gains that existed only on paper. CGT is the tax paid when an asset is sold for more than it cost.
Staking rewards will still be taxed as income, with rates staying at 0 % to 45 % depending on the person’s income bracket. The rule keeps capital growth as well as yield in two separate boxes, mirroring how banks treat interest and share gains.
Impact for users, product teams, and institutional investors
Retail users and firms that carry out thousands of small moves should see a sharp drop in compliance costs. Because the rule removes the need to report a disposal every time a token shifts inside a protocol, users no longer have to work out stacks of paper gains, a risk that had put many off.
Product and compliance teams will find tax events easier to track because the key moment is now the true economic exit, and audits also see record trails shrink.
Institutional investors gain a clear rule book, and predictable tax exposure helps them work out the full cost of holding tokenised products.
The plan was drawn up after talks with industry players and mirrors how protocols really work. It also makes the United Kingdom more appealing to blockchain talent next to capital at a time when the DeFi market is already valued at an estimated USD 52.37 billion for 2025 and global regulatory rivalry is fierce.
The NGNL plan resets the tax point for DeFi activity so that tax follows real profit or loss and friction falls.
