The U.K.'s tax agency now says that gains from lending and staking will not be treated as interest, and that staking tokens will in many cases be liable for capital gains tax.
The guidance outlined that returns via staking and lending of DeFi assets will not be treated as"interest" as digital assets in the UK aren’t considered currencies, but rather property for tax purposes.
However, this approach could create tax problems for stakers with the guidance suggesting that in many cases it would indicate that “beneficial ownership of those tokens” had been passed to the platform. This would mean they were disposed of for tax purposes and incur Capital Gains Tax.
“HMRC treats crypto assets as property for tax purposes. However, this is inconsistent with the approach currently being adopted by Government and other regulatory bodies in the UK, including the Treasury and the FCA” Right,so if i have to pay taxes on staking, isn't that double taxing....Let's say i stake 200 000 pounds worth of crypto on 10% APY, that will be worth 20 000,so i will have to tax as i earn it and after that tax it again once i exchange it for fiat/different asset?Taylor added that the new rules add “undue reporting requirements for the consumer, and create tax compliance confusion” as investors will have to report on hundreds or even thousands of transactions.
“This is out of step with the Government’s stated aim for the UK to be open and attractive as a destination for investment and innovation post Brexit,” he said.