No, there are no LGBT characters in the Lord of the Rings. Note that the Lord of the Rings was published in 1955, and was written over the course of the late 1930s till the 1950s. Gender-identity on the other hand, is a very recent concept. It was introduced in a purely medical context in 1963 by psychoanalyst Robert Stoller, and it didn’t gain the massive following it has today with the maturation of the millenials in the 2000s and 2010s. Transgenderism was, and in many countries around the world still is, viewed as a mental disorder at the time in Europe, just along with homosexuality. Britain was no different in that matter.

Since Tolkiens stories were in several ways based on Arthurian and Nordic myths, it’s unlikely he ever intended any aspects of his work to be interpreted that way. The man was a devout Catholic, who even refused to switch to English from Latin when the liturgy was changed so.

While he has never written anything on homosexuality, we can speculate what he thought of it. One lead to his thoughts on homosexuality would be his stance on divorce, which we can read about in a letter to to C.S. Lewis:

Toleration of divorce—if a Christian does tolerate it—is toleration of a human abuse, which it requires special local and temporary circumstances to justify (as does the toleration of usury)—if indeed either divorce or genuine usury should be tolerated at all, as a matter of expedient policy.

Ofcourse, his take on divorce doesn’t mean anything about his take on homosexuality perse, and he has argued for a Church that could grow and adapt, much like a plant. But if divorce is to be taken as human abuse, sodomy, which the Bible is less friendly about, is unlikely for Tolkien to have been anything positive as well.

Any speaking of love between Men in his stories isn’t sexual in nature, but is of love for your fellow men, or of great friendship. Legolas, Gimli and Aragorn ‘loved’ each other, not in any sexual way, but as friends and brothers in arms do. Sometimes, other people become jealous when they see their friends grow closer to others, fearing for losing their no.1 spot. The jealousy of Andróg of the friendship between Túrin and Beleg was such a case. The whole group didn’t like the newcomer, and the thought of their mighty leader being close with an outsider (an Elf, for Heaven’s sake), caused great discontent among them.

The one time Tolkien touches upon immoral sexual behaviour, it isn’t when he is talking about gender identity or sexual preference, but about lust. Lust is when Sauron and Morgoth look upon Lúthien, who reserves herself for Beren. Lust is what Maeglin feels when he looks upon his cousin Idril.

Lust is a sin, for sex is meant to produce children, and not something for people to give in to because they like it. Lust is a sin, for lust is about fulfilling your own selfish desires, and not the selflessness of a proper Christian. In fact, lust is only appropriate in the context of marriage [check out the Catechismus for this: The Catechism Of The Catholic Church, numbers 2331 to 2463].

Marriage is a union between men and women, and sex can only take place within the context of marriage [Cathechismus 2360 to 2372]. Homosexual relations are thus off limit, since in this Christian context people of the same gender cannot marry, and thus, cannot have sex. Even if it were not for the marriage limitation, there are still several other Biblical phrases and Catholic doctrine that discourage homosexuality, and it is definitely classified as a sin.

Tolkien wasn’t an ignoramus on theology - he was an amateur theologian and conservative in many ways. Considering Tolkiens worldview, his carefulness when it comes to writing on sexuality in general, and the absence of any literary substance that supports even the notion of the existence of homosexuality, it’s safe to say that no one in Middle-earth was, or ever has been, gay.