We start with a clear fact: HMRC treats cryptocurrency as property for inheritance tax purposes. That means digital holdings form part of your estate and may be liable to charges if the estate exceeds the nil-rate band.
In plain English, we will explain how this works when some of your wealth is held as crypto assets. You do not need to have converted holdings into pounds for them to be included.
Access matters as much as value. Executors need keys, wallet details or exchange accounts. Without those, loved ones face delays and extra cost at probate.
Price swings can change the estate total quickly. Good records and simple steps now reduce stress later.
Throughout this guide we show practical choices that affect tax and administration: what you own, where it is held, who can access it and what evidence executors will need. For a fuller walkthrough see our crypto inheritance tax planning UK guide.
Key Takeaways
- Digital coins are treated like property and form part of your estate.
- Executors must have access to wallets and account information.
- Value at death determines charges; swings can raise or lower liability.
- Clear records and simple instructions speed up probate.
- We focus on practical steps for homeowners aged 45–75 to protect family assets.
How HMRC treats crypto assets for inheritance tax purposes
This section sets out why HMRC treats digital holdings the same way as shares and property.
Why cryptocurrency is classed as property.
HMRC places digital tokens into the same “property” bucket as shares and savings. That means they count when valuing an estate for inheritance tax purposes. If you control an exchange login or a private key, those holdings are part of what executors must report.
What “value at the time of death” means
Digital assets are valued at market value on the date of death. That single snapshot feeds into the estate total.
For example, if 1 Bitcoin is worth £30,000 on the date of death, that figure is included in the estate calculation. Rapid price swings after that date do not change the value used for probate.
- Key rules: prove ownership, identify holdings and show control.
- Practical risks: lack of access causes probate delays and queries from HMRC.
Good records and clear access instructions save time and stress. For more detail on HMRC’s approach see how HMRC treats digital assets and guidance on valuation and record-keeping.
What counts as part of your estate when you hold cryptocurrency
We map which digital holdings form part of your estate and why clear information matters to those settling it.
Exchange accounts, software wallets and hardware wallets
Typical assets include exchange accounts (for example Coinbase), mobile or desktop wallets, and hardware devices like Ledger or Trezor.
Private keys and logins are the gateway. Without them executors may not gain access to the asset.
Make access simple to find, but keep it secure.
Tokens beyond Bitcoin and Ethereum
Stablecoins are often easier to value because they track fiat. Utility tokens and security tokens can carry rights or obligations.
Where a token is held affects how easy it is to report and value for the estate.
NFTs and digital collectibles
NFTs and digital collectibles can be harder to value. Thin trading and few comparables cause wide price swings.
| Type | Where held | Key issue for executors |
|---|---|---|
| Exchange account | Centralised platform | Login details, verification |
| Software wallet | Phone/desktop | Seed phrase or password |
| Hardware wallet | Physical device | Device location and PIN |
| NFT / collectible | Blockchain address | Provenance and market comparables |
Practical rule: record what you hold, where it sits and how it is accessed. That simple step reduces the risk of assets being missed.
crypto inheritance tax planning uk: key steps to take before it’s too late
A few clear steps today can spare your family long delays and uncertainty when you are gone.
Create a complete inventory of wallets, exchanges and blockchain addresses
List every exchange used (for example Coinbase), each software or hardware wallet, and key blockchain addresses.
Include account names, emails, and last-used dates. That prevents assets being missed during probate and helps with valuation.
Plan secure private key access without compromising security
Access depends on private keys; without them assets may be unrecoverable.
Use hardware wallets, encrypted password managers, or sealed instructions with a solicitor to balance security and access.
Keep records that your executors can use for probate and HMRC
Save acquisition history, exchange statements, transaction logs and valuation notes.
Clear records speed the process and reduce queries from HMRC.
Align your will with your digital holdings and intended beneficiaries
State who receives what and how executors should locate assets.
Consider professional advice for complex estates or when using gifts and trusts to transfer value fairly.
| Action | Why it matters | Who should do it | Tip |
|---|---|---|---|
| Inventory | Prevents missed assets | Owner | Update yearly |
| Key access plan | Ensures recoverability | Owner + solicitor | Use encrypted storage |
| Records | Supports probate & HMRC | Owner | Keep receipts and logs |
| Will alignment | Clarifies transfers | Owner + adviser | Name executors familiar with digital process |
How to value crypto on the date of death for probate and HMRC
Valuing digital holdings on the date of death means taking a clear, evidence-led snapshot of market prices.
Using fair market value and documenting your method
Use a defensible approach. Check several reputable exchanges, note the exact time and record the quotes you used. An average of those prices is often fairer than a single outlier.
Document everything. Save screenshots, CSV exports and third-party pricing feeds. Say which platforms you checked and how you calculated the final value.
Handling volatility and price differences across exchanges
Markets move. When the estate is near a threshold, small differences matter.
- Take snapshots from at least three reputable exchanges at the same time.
- Export transaction histories so holdings at the date of death are clear.
- Record the averaging method and any adjustments used.
| Step | Why it matters | What to keep |
|---|---|---|
| Price snapshot | Provides objective basis | Screenshots and timestamps |
| Averaging | Reduces single-exchange bias | Calculation sheet |
| Transaction check | Confirms holdings at date | CSV export of transactions |
Executor file tip: keep valuation notes, source links and supporting calculations with the estate records. Clear records make the process smoother and the guidance easier to follow.
How inheritance tax is calculated on crypto assets in the UK
We show how a balance of assets is used to determine any liability and why the snapshot at the date of death matters.
The nil-rate band and when the £325,000 threshold applies
The estate total brings together property, savings, investments and digital holdings. If the combined sum is above the nil-rate band of £325,000, a charge may follow.
Price swings matter. A rise in value close to the threshold can create a sudden liability for the estate.
Understanding the 40% rate on amounts above the band
Amounts above the threshold are taxed at 40% in most cases. For example:
| Estate total | Taxable amount | Charge |
|---|---|---|
| £400,000 | £75,000 | £30,000 (40%) |
| £500,000 | £175,000 | £70,000 (40%) |
When tax is due and why the six-month deadline matters
Payment is generally due within six months of the end of the month in which death occurred. Late payment can attract interest and penalties.
Practical problem: an estate may be asset-rich but cash-poor. If executors cannot access digital holdings quickly, they may face forced selling at an unfavourable time to meet the bill.
- Record holdings, keys and exchange details.
- Keep valuation notes showing the date and sources used.
- Tell executors where crucial access information sits.
Good records reduce the risk of rushed sales and help the process run smoothly for those who must settle the estate.
Reliefs and exemptions that can reduce inheritance tax on crypto
Knowing which transfers qualify for relief helps you protect family value and reduce immediate estate bills.
Spouse and civil partner transfers
Transfers between spouses or civil partners are normally exempt. If digital holdings pass directly to a surviving partner, the amount is removed from the estate for inheritance tax purposes.
Executors still need clear proof of ownership and evidence of the transfer. Keep records and confirmations so there is no delay.
Charitable giving and its impact on estate value
Gifts to registered charities are also exempt and can reduce the taxable value of the estate.
Leaving a gift in your will can lower the overall bill and support causes you care about.
- Write gifts and wallet details clearly into your will.
- Update documents to avoid outdated references or missing access information.
- Pair exemptions with sensible estate planning to get the best result for your family.
For more practical steps and examples see our guide on what you need to know.
Estate planning strategies for crypto investors to minimise tax
We outline straightforward strategies to protect value and make transfers smoother for your beneficiaries.
Gifting during your lifetime can reduce the estate total and help family, but it is a disposal for capital gains purposes.
Disposals include selling for pounds, swapping one token for another, paying for goods or gifting to someone else. Each can trigger gains that need reporting.
Using trusts for digital assets
Trusts let you control who benefits and when. They can help with succession, governance and, in some cases, tax management.
Set-up must be careful. A trust that is poorly drafted can cause extra costs and complexity for families.
Structuring as portfolios grow
As digital assets become a larger part of an estate, consider clear governance: named trustees, regular reviews and written instructions for executors.
- Get specialist advice before acting—rules change and detail matters.
- Keep records of disposals and acquisition dates to support any capital gains calculations.
| Route | Benefit | Key risk |
|---|---|---|
| Lifetime gift | Reduce estate size | Immediate disposal may trigger gains |
| Trust | Control and succession | Set-up complexity |
| Corporate holding | Central governance | Compliance and costs |
Capital gains tax after inheriting crypto: what beneficiaries need to know
We explain what happens next for beneficiaries so they avoid surprises when they sell or use digital holdings.
The base cost reset to market value at the date death
When someone dies, the base cost normally resets to market value on the date death. That becomes the beneficiary’s starting point for future capital gains tax calculations.
What triggers a gains tax event
Disposals create gains tax consequences. Typical triggers are:
- selling tokens for sterling;
- swapping one token for another;
- paying for goods or services with tokens;
- gifting to another person (which can count as a disposal).
Using losses and keeping transaction records
Losses can be set against gains. That reduces a beneficiary’s overall liability on later disposals.
Keep clear records from day one. Save wallet histories, exchange statements, disposal dates, sterling values and fee details. Good records make reporting on capital gains simpler for individuals and help avoid mistakes with gains tax.
Compliance, reporting and future changes that affect crypto estates
Good compliance starts with clear evidence and tidy paperwork that stands up to HMRC scrutiny.
HMRC reporting expectations and evidence to keep are simple in principle. Keep valuation workings, exchange statements, wallet addresses and transaction exports. Those files show how you reached each figure.
Practical Self Assessment points
Beneficiaries may need to report disposals via Self Assessment if they sell or swap inherited holdings. Keep dates, sterling values and fee details to avoid under-reporting.
What the 2026 service reporting change means
From 1 January 2026 UK service providers will pass user and transaction information to HMRC. That increases visibility and makes accurate records essential.
When voluntary disclosure is the right choice
If historic errors exist, voluntary disclosure can stop penalties growing. We recommend early specialist advice so you can correct past returns with confidence.
| What to keep | Why it matters | When to act |
|---|---|---|
| Valuation notes and screenshots | Support estate figures | At death and probate |
| Exchange statements & transaction exports | Link holdings to values | Before Self Assessment or disclosure |
| Records of staking or rewards | Shows possible income tax | Annually and on disposal |
Clear records, consistent methods and prompt advice make compliance manageable. We can help you prepare the file executors will need.
Cross-border and situs issues for UK residents and non-domiciled individuals
Residency and control, not geography, often drive how digital property is treated across borders.
Worldwide exposure can apply to long-term UK residents. If someone has been resident for many years, their entire estate — including digital assets — may fall within UK rules.
Limited UK-only exposure in some cases
If an individual is not long-term resident at death, IHT may apply only to UK-situs property. That means only certain assets within the UK are caught. Determining where a token ‘sits’ is hard because digital holdings have no physical address.
Why situs is unclear and control matters
Authoritative bodies differ. The Law Commission leans residence-based. STEP points to control of the private key. The practical test often comes down to where the holder exercised control.
Remittance basis for non-doms
Non-doms using the remittance basis should be careful. Bringing proceeds or gains into the UK can create a charge. Keep overseas records and think through transfers before moving funds.
Practical tip: build a facts file now — residency history, account lists and wallet control notes — so advisers can assess exposure quickly and save families time and potential loss. For further guidance see our digital assets guidance.
Conclusion
Ultimately, clear access, good records and sensible instructions protect value for those who follow you.
Digital holdings are part of your estate and count as assets. The value at death is the anchor for probate and any charge.
Make a simple inventory. Arrange secure key access. Keep valuation notes and transaction history so executors can act quickly.
Review your will, confirm beneficiaries and tell someone where to find the information. Beneficiaries should also be ready for later capital gains effects when they sell.
If holdings are significant, cross‑border or complex, get specialist advice now. That step often saves time, money and worry for your family later.