Uniswap Tax UK: How HMRC Taxes Your LP Position

Uniswap tax in the UK involves checking each part of the position: the tokens contributed, the liquidity position received, subsequent returns and the eventual withdrawal. A deposit and withdrawal should not be collapsed into a single profit number.

This guide explains the current evidence checks and separates them from the proposed April 2027 changes. Keep your transaction history and have uncertain treatment reviewed before relying on a tax total.

Adding liquidity: account for both the disposal and the new asset

HMRC's CRYPTO61620 guidance asks whether beneficial ownership passes. Where tokens are exchanged for a liquidity token, the deposited assets and the acquired position need separate records. Assess the actual arrangement rather than assuming every protocol or version has identical terms.

For fungible assets, apply same-day and 30-day matching before the Section 104 pool. Do not automatically pool distinct NFT positions as though they were identical tokens.

Worked example: an ETH/USDC liquidity deposit

This simplified illustration assumes the exchange is a disposal, no same-day or 30-day matches apply, and there are no fees. It is not a quote or a calculation for your wallet.

The example recognises £800 of gains on the deposited assets and a £4,000 acquisition cost for the new position. These are different entries: recording the new position does not cancel the earlier gain. Actual tax also depends on the rest of the year, losses and your circumstances.

Removing liquidity and reviewing returns

Reconcile the position given up with every asset received. Identify any amount separately treated as income before calculating the capital result, so the same value is not counted twice. Preserve GBP prices, quantities and attributable costs.

The treatment of returns depends on their nature. HMRC's CRYPTO61214 guidance distinguishes revenue earned from a service from capital growth. Automatically reinvested value and separately collected tokens require examination of their terms; neither a token label nor a withdrawal alone resolves the question.

An evidence checklist for your Uniswap report

1. Include every relevant source. Retain wallet history, exchange purchases and transfers needed to explain how the contributed assets were acquired.
2. Identify the position. Keep the network, protocol version and position identifier. Distinguish transfers of an existing position from new deposits.
3. Reconcile quantities. Check both contributed assets, liquidity tokens or the NFT position, collected returns and withdrawn assets.
4. Check prices and costs. Missing historical purchase evidence should remain visible, not silently become a verified zero cost.
5. Review the calculation. Check each disposal's matching, allowable costs and treatment of returns. Escalate uncertain ownership or income/capital questions to your adviser.

For reporting steps, use the 2025/26 Self Assessment guide. Keep earlier years separate: changes in rates or legislation must not be applied indiscriminately across your history.

What could change from April 2027?

The July 2026 draft legislation proposes different treatment for qualifying lending, borrowing and automated market-making arrangements. The proposed start is 6 April 2027. Qualification and transitional rules matter; the proposal does not make every liquidity transaction tax-free.

Read the DeFi reform guide for the distinction between current treatment and proposed rules. A protocol name alone does not establish eligibility.

Common questions