In response to the first consultation on DeFi lending and staking, CIOT and the Association of Taxation Technicians (AAT) have pitched the need for a wider, bespoke set of rules for crypto assets. 

Whilst welcoming the potential changes to modify the tax treatment of crypto assets used in decentralised finance (DeFi) lending and staking transactions, leading professional bodies CIOT and AAT have outlined some recommendations, calling for a ‘simpler, clearer and more efficient regime’.

Under the changes, which consider granting HMRC additional powers to recover unpaid tax on crypto transactions, the use of crypto assets in DeFi transactions would no longer be treated as giving rise to a disposal for tax purposes, which usually triggers a capital gains tax (CGT).