Last updated: August 2024
This article is general information about UK tax rules, as we understand them on the date shown. It is not advice on your circumstances. Tax rules depend on your own facts and can change, so please speak to a tax professional before acting on it.
Cryptoassets are treated as property for Inheritance Tax (IHT) purposes. This means that they will form part of an individual’s Estate on death and IHT may be payable, depending on the overall size of the Estate. Gifts during an individual’s lifetime to another individual are Potentially Exempt Transfers (PETs).
IHT may be payable if the donor dies within 7 years of making the PET. Gifts into a Trust are Chargeable Lifetime Transfers which may be subject to IHT at the date of transfer. If you are contemplating gifts or transfers at an undervalue of cryptoassets, it is recommended you seek bespoke advice from a qualified tax professional.
It is important to store your cryptocurrencies in a way so that they are accessible by the parties you intend to give them to. Having your bitcoin and other cryptocurrencies in a cold wallet that only you know where the private key for it is means they will be unable to access your cryptocurrencies and they may be lost forever.
This happened to the founder of QuadrigaCX, a large Canadian cryptocurrency exchange when the founder died whilst travelling in Asia and no one else had access to the exchange wallets holding all of the customer funds.
Need to sort out your crypto taxes? Use Recap, the privacy focused cryptocurrency accounting software to calculate the taxable gain or loss on your cryptocurrency investments!