Is Luna<->bLuna taxable in UK?

Hello Guys, does anyone know if swapping Luna to bLuna and back to Luna (in order to stake and unstake) a taxable event in the UK please? I understand that rewards are taxable however I don’t think swapping between Luna and bLuna is not, but I am not 100% sure.

I did and auto sync and Koinly shows massive losses for these swaps which works in my favor but doesnt seem right? so I used stake tax and then just did replace all bluna with luna in the spreadsheet. Im not paying tax on like for like, its the same thing! Minefiled! Will see if her majestys mafia come knocking but thats what i submitted!

Hi @MFCrypto ,

Thanks for pitching your question!

By default, for the UK, Koinly treats all trades/swaps/exchanges as taxable, gains generating event.

If there is any doubt with HMRC rules, we would recommend reaching out to a tax professional in your area. Koinly has a list of tax accountant we can recommend here, including UK ones Cryptocurrency Tax Accountants | Koinly

If your accountant says something different, please reach out to us at [email protected] , we are always interested! We can also help you implementing their recommendations in practice.


Hi @MFCrypto, Your question is a very good one especially given the fact that HMRC issued new guidance back in February on Crypto DeFi Lending and Staking. This new guidance has created a fair amount of distress for DeFi participants in the UK because it provides that (most?) crypto lending and staking transactions will now be treated as disposals subject to the capital gains charging provisions of the UK tax regulations.

Below is an excerpt from the HMRC Guidance which outlines its new position on crypto lending/staking, a position that turns on whether the lending/staking transaction involves the transfer of beneficial ownership of the loaned/staked tokens to the DeFi platform. I believe that ownership is transferred in most liquidity/lending activities but I also think this is not necessarily the case where crypto is being staked on proof of stake blockchains and ownership arguably remains with the staking crypto holder.

CRYPTO61620 - Decentralised Finance: Lending and staking: Chargeable Gains: Making a DeFi loan

It is important to consider whether the lender/liquidity provider actually transfers their beneficial ownership of the tokens to the borrower/Decentralised Finance (DeFi) lending platform. This will require an examination of the contract/terms and conditions. Where the recipient of the tokens has the ability to deal with the tokens received as they want then this will be a strong indicator that the recipient has acquired the beneficial ownership of those tokens. Conversely if the recipient is specifically restricted from dealing with the tokens received, this will be a strong indicator that the recipient does not have beneficial ownership of the tokens received.

Where the making of a loan/staking (as described at CRYPTO61120) results in the lender/liquidity provider transferring their beneficial ownership of the tokens to the borrower/DeFi lending platform, this will give rise to a disposal of the loaned/staked tokens. The disposal will occur at the time that the lender/liquidity provider transfers the beneficial ownership of their tokens to the borrower/DeFi lending platform.

The lender’s/liquidity provider’s consideration for the disposal will depend on the facts.

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