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Aave Founder: UK Considers Treating DeFi Deposits as 'No-Gain No-Loss,' Benefitting Crypto Lending Tax Treatment

2 hours ago

On November 27th, Stani.eth, the founder and CEO of Aave, stated in a blog post that "HM Revenue & Customs has released the results of its consultation on the tax treatment of DeFi activities (such as lending and staking) in the UK. One particularly notable conclusion is that when a user deposits assets into Aave, the deposit itself is not regarded as a capital gains tax event, adopting a no-gain, no-loss approach. This is a major victory for UK DeFi users who wish to borrow stablecoins using cryptocurrency collateral." "We advocate for DeFi and make sure that the tax treatment of interacting with lending protocols aligns with economic reality: users borrowing against collateral to fulfill liquidity needs do not have the intention to dispose of their assets. We wholeheartedly support this approach and hope to see these changes incorporated into UK tax law as soon as possible."
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