The taxation of decentralised finance involving the lending and staking of cryptoassets

The ATT has responded jointly with the CIOT to the HM Revenue and Customs consultation document on The taxation of decentralised finance (DeFi) involving the lending and staking of cryptoassets, issued on the 27 April 2023.

In our response, we welcomed these proposals, as they should reduce the potential for ‘dry’ tax charges in a number of situations, which should help to ease some of the reporting burdens arising from DeFi transactions. However, we still consider there is a need for a wider, bespoke set of rules for cryptoassets.

Both bodies are also concerned about the challenges of highlighting potential tax consequences of cryptoasset transactions to unrepresented investors.

Our full response is available to download.