> For the complete documentation index, see [llms.txt](https://docs.recap.io/uk-tax-guide-for-individuals/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.recap.io/uk-tax-guide-for-individuals/cryptocurrency-tax/new-hmrc-defi-guidance/consider-the-tax-treatment/staker-lender-collateral-provider/capital-rewards/bo-transferred/on-receipt-of-capital-reward.md). # On Receipt of Capital Reward This is the tax position upon receipt of the capital reward, where it is not received at the time of exiting the yield generating activity or upon liquidation. ### **CGT disposal –** **‘Marren v Ingles right' to receive capital reward tokens** When the capital reward tokens are received (usually this will be upon exit from the yield generating activity), a capital gains tax calculation is required to adjust for the difference between the estimated and actual market value of the capital reward tokens received. At the time of entering the yield generating activity, the estimated future capital reward tokens were subjected to CGT. Upon entry, there was also an acquisition of ‘Marren v Ingles right' to receive an unascertainable future quantity of tokens. The acquisition cost of his ‘Marren v Ingles right' is the estimated value of the future reward which has been used in the capital gains tax calculation upon entry. On receipt of the capital reward tokens, a further capital gains tax calculation is required. The disposal proceeds used in the calculation is the sterling market value of the capital reward tokens at the date of receipt. The acquisition cost is the estimate of the future capital reward, which was made upon entry. Where the estimate upon entry was too low, there will be a further capital gain upon receipt of the capital reward tokens. Where the estimate upon entry was too high, there will be a capital loss upon receipt of the capital reward. Where the disposal of the ‘Marren v Ingles right’ gives rise to a capital loss, it may be possible to elect to set that loss against any capital gain that arose upon entry. For more information about this election HMRC point you to [CG15080](https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15080) onwards HMRC Example 9 at [CRYPTO61679](https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto61679) shows the capital gains computation where a loss is realised upon disposal of the 'Marren v Ingles right', at the time of receiving the reward tokens. ### **CGT acquisition – capital reward tokens** The acquisition cost of the capital reward tokens received is the sterling market value of the tokens at the date of receipt. When the tokens are subsequently disposed of (let’s say sold for fiat for example), you will only pay further capital gains tax to the extent they appreciate in value between receiving the reward tokens and eventual disposal. Equally, if they fall in value by the time they are disposed of, a capital loss will be realised. Unless in the same tax year, a capital loss cannot be carried back to reduce any earlier capital gain realised upon entry or exit from the yield generating activity. ### Example See our [Example 1C](/uk-tax-guide-for-individuals/cryptocurrency-tax/new-hmrc-defi-guidance/consider-the-tax-treatment/staker-lender-collateral-provider/capital-rewards/bo-transferred/example-1c.md) illustrating the tax position at each point in the lifecycle of staking tokens where there is a transfer of beneficial ownership and capital rewards are received. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.recap.io/uk-tax-guide-for-individuals/cryptocurrency-tax/new-hmrc-defi-guidance/consider-the-tax-treatment/staker-lender-collateral-provider/capital-rewards/bo-transferred/on-receipt-of-capital-reward.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.