The UK government is seeking public opinion on how to tax loans and staking for crypto assets within the framework of decentralized finance (DeFi).
Financial applications that are constructed on top of blockchain technology are referred to as DeFi. This might include platforms for lending, borrowing, and staking.
The government is particularly interested in learning more about the taxation of crypto asset loans and staking. In a call for evidence paper released on Tuesday, Her Majesty’s Revenue and Customs (HMRC) stated that it intended to investigate whether administrative burdens and expenses for taxpayers who participate in the emerging industry might be decreased as well as whether the tax treatment might be more in line with the basic economics of the transactions.
Investors, experts, and groups engaged in DeFi-related activities, such as technology and financial services companies, trade associations and representative bodies, educational institutions and think tanks, and legal, accounting, and tax advisory firms are among the groups that HMRC is looking for input from. Interested parties have until August 31, 2022, to respond via an agency-provided email.
The UK government is looking for opinions on how to tax “staking” and cryptocurrency assets loans in the context of decentralized finance (DeFi).
According to the announcement, the government will publish a summary of the responses along with information on its next steps after the call for evidence.
The government unveiled a list of initiatives in April with the goal of making the UK a leader in the cryptocurrency industry. One of them included “major surgery” on the tax code “to make it work more easily for cryptocurrency,” according to Economic Secretary John Glen.
The government opened a consultation on granting the Bank of England the power to name administrators to oversee the insolvency plans for failed stablecoin issuers in May.
A former UK chancellor recently expressed concern that the nation is lagging behind its rivals in Europe when it comes to cryptocurrency regulation. According to Cointelegraph, Philip Hammond, the Chancellor of the Exchequer of the United Kingdom from 2016 to 2019, claimed that there has been a glaring lack of coherence and direction in terms of cryptocurrency policy.
