News and insights from the Verallo team
Tax reminder: Cryptoassets and inheritance tax are on HMRC’s radar
As tax season approaches, one area that continues to raise questions is cryptoassets and their treatment under inheritance tax (IHT). Digital holdings such as cryptocurrencies are no longer peripheral; HMRC has made it clear that they must be properly accounted for when valuing estates.
Understanding the implications
HMRC treats cryptoassets as part of an estate’s property for IHT purposes. This means any cryptocurrencies, tokens, or other qualifying digital assets should be included in IHT calculations. Incomplete reporting or mistakes could lead to complications down the line, particularly as digital assets are more complex to value and access than traditional property.
Key considerations for executors and advisers
Executors, personal representatives, and tax advisers are being reminded to:
- Confirm the presence of cryptoassets in the estate, including wallets, tokens, and any other digital holdings
- Ensure proper reporting within IHT returns, avoiding misclassification or omission
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Review past submissions if cryptoassets were overlooked, and make corrections where necessary
Unlike physical or more conventional investments, cryptoassets can present unique challenges: private keys may be lost, access may be restricted, and market volatility can affect valuations. Importantly, there is no relief for a decrease in value after the date of death, which can affect tax calculations.
HMRC’s current approach
HMRC has indicated it will take a pragmatic approach when amendments are made voluntarily to account for cryptoassets. However, returns that remain incorrect and are later investigated may still attract penalties. The key message is clear: proactive review and correction are better than waiting for an enquiry.
Verallo’s view
At Verallo, we are seeing increased attention on digital assets across all areas of tax, not just inheritance tax. As regulation and reporting frameworks continue to develop, cryptoassets are no longer a niche consideration – they are becoming a mainstream part of tax compliance and estate planning.
How we can help
This tax season is an ideal time to review asset disclosures, revisit estate planning assumptions, and ensure nothing has been missed. Whether you are acting as a personal representative, adviser, or individual with digital holdings, clarity now can prevent complications later.
If you would like to discuss how cryptoassets may affect your tax position or estate planning, contact our team today.