[UK Proposes 'No Gain, No Tax' Rule for DeFi Taxation] According to CoinDesk, the UK government is drafting a new tax framework that could benefit DeFi users. A proposal released this week shows that HM Revenue & Customs (HMRC) supports applying a 'no gain, no tax' principle to cryptocurrency lending and liquidity pool arrangements. Under the current system, DeFi users depositing funds into protocols, even if only to earn profits or use as collateral for loans, may trigger capital gains tax. The new initiative would defer taxation until an economically significant disposal of assets actually occurs. This means that users depositing cryptocurrencies into lending protocols or providing tokens to automated market makers would no longer need to pay taxes at the time of deposit. Taxes would only be due when they eventually sell or trade the assets and realize gains or losses. The proposal aims to align tax rules with the actual operations of DeFi, thereby reducing administrative burdens and avoiding unreasonable tax outcomes. The new principle also applies to complex multi-token arrangements. If users withdraw more tokens than they deposited, they would be taxed on the profit; if they withdraw fewer tokens, it would be considered a loss. However, this model has not yet been finalized, as the government is still consulting with professionals and DeFi developers. While HMRC has not set a legislative timeline, it stated that it will continue engaging with the industry to assess the necessity of legislation.