Crypto Gifts and Inheritance Tax in the UK

UK crypto guides mostly cover selling. Giving is different, and it produces the outcome people find hardest to accept: you can owe tax on crypto you gave away and received nothing for.

Gifting is a disposal for CGT

HMRC treats cryptoassets as property, a chargeable asset. Capital Gains Tax applies when you dispose of crypto, and disposal includes selling for pounds, swapping one coin for another, spending it, and gifting it, except to a spouse or civil partner.

So a gift to a child, a sibling, a friend or anyone else is a CGT disposal by the giver. There is no cash to pay the tax with, which is the entire practical problem: the liability is real and the funding for it is not.

Gains within the annual exempt amount are tax free. That amount is 3,000 pounds for 2025/26 and 2026/27. Above it, gains are taxed at 18% for a basic rate taxpayer and 24% for a higher or additional rate taxpayer, rates in force since 30 October 2024. Verify current figures with HMRC before relying on them.

The spouse and civil partner exception

Transfers to a spouse or civil partner are outside the gifting disposal rule. That makes them the one genuinely useful planning tool in this area, and it works because the transfer is treated as producing neither gain nor loss, with the receiving spouse taking on the transferring spouse's base cost.

The consequence is that the gain is not eliminated, it moves. If the receiving spouse later disposes, the gain accrued during the first spouse's ownership is taxed then, at the receiving spouse's rate and against their annual exempt amount. Used deliberately, that is why the exception matters: two allowances and possibly a lower rate band.

Section 104 pooling makes the calculation non obvious

HMRC uses Section 104 pooling, an averaged cost across all units of a given token, plus the same day rule and the 30 day rule. You cannot select your cheapest or most expensive coins to give away. The pooled average applies across your whole holding of that token.

So the gain on a gift is measured against the pool average at the time, and the gift itself removes units from the pool. If you gift and then buy the same token back within 30 days, the matching rules change which acquisitions the disposal is set against.

Valuing the gift

Because no money changes hands, the disposal is computed on market value at the time of the gift. Record the value and the source you used at the moment of transfer, since reconstructing a price for a specific timestamp years later is far harder than capturing it on the day.

Inheritance

Crypto held at death is part of the estate and is valued as part of it. That is a separate regime from CGT and it is where estates rather than individuals need advice, because the interaction between the estate valuation and what a beneficiary later does with the coins is exactly the point where general guidance stops being sufficient.

The practical problems for an estate are less legal than operational, and they are severe:

• Locating every exchange account and self custody wallet. Assets nobody can reach still form part of the estate.
• Obtaining exchange statements and balance confirmations as at the date of death.
• Recovering seed phrases and hardware wallet access. This is the failure that has no remedy.
• Reconstructing the deceased's acquisition history, which the beneficiary will eventually need.

Reporting

UK crypto is reported through Self Assessment: SA108 for capital gains in the cryptoassets section, SA100 for crypto income as miscellaneous income. You must report if your net gains exceed the annual exempt amount, or if your total disposal proceeds exceed 50,000 pounds in the tax year even where no tax is due. The tax year runs 6 April to 5 April, with an online filing and payment deadline of 31 January.

From 1 January 2026, UK crypto platforms report user data to HMRC under CARF, with the first reports covering the whole of 2026, so HMRC increasingly holds the data already.

Our UK crypto tax guide covers the full framework including pooling and the reporting thresholds.

General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.