During a summit in Brussels Thursday, EU leaders supported cautiously exploring the windfall option despite the range of complex issues regarding how to use the sanctioned assets, according to people familiar with the talks.

European Union leaders are backing plans that would impose a windfall tax on profits generated by more than €200 billion of Russian central bank assets to aid Ukraine's reconstruction, and will seek the political support of key Group of Seven countries, according to Bloomberg.

Brussels has already been in talks with Washington, and discussions will continue in the coming days and weeks. The United Kingdom has previously supported the plan to use the income.

The European Commission is preparing a more detailed proposal, expected to be presented by the end of the summer, although the exact timing remains uncertain due to various political and legal challenges.

According to Bloomberg's sources, the prospect of taxing and seizing the windfall profits raises legal as well as financial questions. Several leaders at the summit highlighted concerns first raised by the European Central Bank, which warned that using the proceeds from the assets could encourage official reserve holders to turn their back on the euro, according to the people.

Earlier, the European Union concluded that the lawful confiscation of assets of the Russian Central Bank for the reconstruction of Ukraine was not possible.

Meanwhile, the new legislation will allow the British government to maintain sanctions against Russia until compensation is paid to Ukraine and introduces a new pathway for frozen Russian assets that can be donated towards Ukraine's recovery.