Bitcoin inheritance requires a date-of-death GBP valuation supported by evidence executors can explain to HMRC and beneficiaries.
Bitcoin IHT value: GBP evidence at death
The defensible probate value is the open-market GBP price at death. It is not the value when someone finds the wallet.
Which time fixes the bitcoin value?
The date of death should fix the valuation point. Where material, use the exact time of death.
Bitcoin trades around the clock. Use a source that shows an archived BTC/GBP quote at, or close to, that time.
An exchange dashboard often proves neither beneficial ownership nor the relevant market value. It may show a rounded balance or a last-traded USD price.
It may also omit spreads, account limits, or the screen-capture time.
For a UK IHT return, record: the exact death timestamp, Bitcoin quantity, wallet or account reference, and chosen BTC/GBP source. Record the bid, midpoint, or spot convention. Save the GBP value and archived proof. IHT is normally due six months after the month of death ends. Start evidence gathering and liquidity planning early.
Audit bitcoin values for IHT400 wallets
A working paper should link each Bitcoin holding to ownership evidence. It should also link quantity, death-time pricing, and saved proof.
Use one row for each wallet, exchange account, or restricted holding. Do not merge balances before saving the evidence for each holding.
| Working-paper field |
What to record |
Evidence retained |
| Wallet or account reference |
Public address, platform name, and masked account identifier |
Explorer page, statement, or account export |
| Bitcoin quantity |
BTC to eight decimal places, where available |
Balance captured at death time |
| Price basis |
BTC/GBP bid, midpoint, spot, or quoted executable price |
Archived chart, market-data export, or index record |
| Timestamp |
UK date, time, and time zone |
Death evidence and source timestamp |
| GBP result |
Quantity multiplied by the stated price |
Calculation sheet and preparer note |
| Restrictions |
Pending withdrawal, lock, review, or lost-access issue |
Exchange correspondence and transaction IDs |
A simple template can be copied into the estate file:
text
Asset reference:
Wallet address / exchange account:
BTC balance at death:
Death date and time:
Chosen BTC/GBP source and market:
Price convention used:
GBP value:
Evidence saved at:
Reason this source represents open-market value:
Reviewed by executor / tax adviser:
Choose a liquid BTC/GBP market where possible. Then record why you chose that market.
If an exchange only quotes BTC/USD, retain that Bitcoin price. Also retain the USD/GBP rate from the same time.
Do not apply a later foreign-exchange rate.
| Price source | Best use | Evidence strength | Main limitation |
|---|
| Liquid BTC/GBP exchange | Direct GBP value near death time | High if timestamped and archived | Platform-specific spread or outage |
| Independent market index | Cross-checking a market price | Medium to high with a method | May not match an executable GBP price |
| BTC/USD plus FX rate | No reliable BTC/GBP market is available | Medium if both timestamps align | Two price assumptions need support |
Never disclose a seed phrase or private key to a beneficiary, adviser, or recovery service. A legitimate tax adviser does not need the phrase.
An exchange administrator should not request it.
Bitcoin estate evidence flow
1. Secure access
→
2. Capture balances
→
3. Fix GBP value
→
4. Archive proof
→
5. Decide sale or transfer
Before filing a UK IHT return, executors should keep a reasonable-enquiries log covering the digital asset estate.
It can cover devices, password managers, email inboxes, and bank statements. It can also cover card statements, past tax returns, and exchange notices.
Review known Bitcoin wallet records too. A small historic bank payment may identify an exchange account.
That account may now have a nil balance. A hardware-wallet purchase or transaction reference may point to self-custody.
Record each enquiry date, source checked, result, and platform contacted. This creates an auditable crypto estate administration trail.
It helps show why an asset was included, excluded, or treated as inaccessible. This matters when preparing the IHT return and probate papers.
IHT cash, bitcoin sales and estate CGT
IHT and later Capital Gains Tax are separate events. Later disposals are measured against the probate value.
IHT is normally payable six months after the month of death ends. Interest can arise after the deadline.
Map cash, debts, grant timing, and exchange access early. Do this during the first weeks of administration.
The estate usually acquires Bitcoin at its probate value for CGT. A sale above that value can create a gain.
A sale below it can create an administration-period loss. The rules and available reliefs may limit that result.
A probate value is not a sale price.
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Assess marketability for each holding separately. For Bitcoin across several exchanges, value each account on its own market.
Record any withdrawal hold, account review, daily limit, or wide spread. A displayed last-traded price may not be achievable on sale.
Stablecoins need evidence of the token, network, issuer, and any de-pegging risk at death. Record staking rewards, forks, and airdrops only where the estate had legal entitlement.
Each also needs a measurable balance at the valuation point. Locked tokens may need a discount analysis.
This applies where they could not realistically be transferred or sold.
These facts also shape cash-flow planning. A valuable holding may not be liquid enough to meet IHT when due.
Avoid valuation disputes and lost evidence
Keep a clear decision record. It lets parties resolve disagreements through evidence rather than market hindsight.
Stablecoins, forks, airdrops, staking rewards, and locked tokens need separate entries. Their quantity and legal entitlement may differ from the original Bitcoin holding.
Their transfer limits and market price may also differ. Record those facts separately.
This guidance is less relevant where Bitcoin belongs to a company or trust. It cannot resolve disputes about domicile, will validity, fraud, or cross-border succession.
Seek tailored legal, tax, and digital-forensics advice where keys are lost or ownership is disputed. Seek advice where fraud is suspected or the estate has cross-border links. Do the same where a company or trust owns the cryptoasset. Do not move funds to “test” access before saving evidence. Confirm authority under the Administration of Estates Act 1925. Follow the relevant probate process in England and Wales.
Where parties dispute a Bitcoin probate value, preserve every proposed death-date valuation. Do not replace an unfavourable figure with a preferred one.
A short comparison schedule can show the death timestamp and time zone. It can show BTC quantity, BTC/GBP price, and the bid, offer, or midpoint convention.
It should show source method, trading volume, spread, and resulting GBP amount. Include every source considered.
The executor can then select the figure that best reflects open-market value. Explain why a liquid direct GBP market was preferred.
Also note any material difference from less comparable sources.
If an exchange gives its own historic price, save its response. Keep independent archived market data alongside it.
This evidence lets beneficiaries and HMRC review the valuation. It avoids hindsight after a market price movement.
Common questions
How is bitcoin valued for UK inheritance tax?
Bitcoin is valued at its open-market GBP value at the date and time of death. Keep evidence of quantity, price source, pricing convention, and timestamp for the IHT400 calculation.
Does a later bitcoin sale change the IHT value?
No, a later sale does not automatically change the date-of-death IHT value. It may create a capital gain or loss for the estate, measured against the probate value.
When must an executor pay IHT on bitcoin?
IHT is normally due six months after the month of death ends. Interest may apply after that date, even if Bitcoin remains unsold or exchange review delays withdrawal.
Can an executor transfer bitcoin to a beneficiary?
An executor can transfer Bitcoin after confirming authority, liabilities, and the will or intestacy rules. Record wallet addresses, quantity, date, time, and the agreed estate value.
What evidence proves a self-custody wallet?
A self-custody wallet needs a public address, on-chain history, and a balance record from the relevant time. Never place a seed phrase, private key, or recovery words in probate papers.
Will HMRC know about a deceased person's crypto?
HMRC may identify crypto through exchange records, bank transfers, enquiries, and estate disclosures. Executors should make reasonable enquiries and keep records rather than assuming a wallet stays outside estate review.
The essentials:- Fix the Bitcoin GBP value at death, and use the death time where material.
- Build a working paper linking each balance to archived wallet and market evidence.
- Keep IHT valuation separate from later estate CGT gains or losses on sale.
- Preserve access evidence before moving coins, and never disclose a seed phrase.
Related sources
These articles can help you explore the topic in more depth:
