# Are lp deposit a taxable event?

**URL:** <https://discuss.koinly.io/t/are-lp-deposit-a-taxable-event/13097>\
**Category:** Tax Questions\
**Created:** [April 4, 2022, 2:56pm UTC](https://discuss.koinly.io/t/are-lp-deposit-a-taxable-event/13097 "2022-04-04T14:56:29Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![simplitia](https://avatars.discourse-cdn.com/v4/letter/s/94ad74/32.png) [@simplitia](https://discuss.koinly.io/u/simplitia)\
**Post date:** [April 4, 2022, 2:56pm UTC](https://discuss.koinly.io/t/are-lp-deposit-a-taxable-event/13097/1 "2022-04-04T14:56:29Z")

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Hi, I notice that koinly considers LP deposits a taxable event. However, curious how are loss and gains calculated based in and out of lp? what do you do with yours, do you just leave it as is? thanks.

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**Author:** ![Mark\_DesLauriers](https://yyz2.discourse-cdn.com/flex052/user_avatar/discuss.koinly.io/mark_deslauriers/32/2255_2.png) [@Mark\_DesLauriers](https://discuss.koinly.io/u/Mark_DesLauriers)\
**Post date:** [April 4, 2022, 4:10pm UTC](https://discuss.koinly.io/t/are-lp-deposit-a-taxable-event/13097/2 "2022-04-04T16:10:49Z")

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I am applying UK tax law and guidance so I follow Koinly’s position on LP deposits. The position in the UK has been placed in a state of flux by the recent “proposed” new guidance issued by HMRC in Feb 2022. This new guidance is more onerous than previous guidance from HMRC.

Under the new guidance, a transfer of crypto to a liquidity pool is considered a disposal and subject to Capital Gains Tax regardless whether you receive a new token from the liquidity pool. Further, removing liquidity is also seen as a disposal subject to Capital Gains Tax. So you have two capital gains taxable transactions - one when you add liquidity and one when you remove liquidity.

Here is Koinly’s blog discussion of the proposed new guidance issued by HMRC:

[https://koinly.io/blog/hmrc-defi-guidance-update/](https://koinly.io/blog/hmrc-defi-guidance-update/)

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**Author:** ![system](https://canada1.discourse-cdn.com/flex052/uploads/koinly_app/original/1X/7ac58e5593a7122893d066794a7254dcdb5ddb31.png) [@system](https://discuss.koinly.io/u/system)\
**Post date:** [June 3, 2022, 4:11pm UTC](https://discuss.koinly.io/t/are-lp-deposit-a-taxable-event/13097/3 "2022-06-03T16:11:03Z")

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