Are transfers of Bitcoin and other cryptoassets labelled as "gifts" really tax-free? Many people assume that sending crypto to a family member, friend or charity removes tax consequences — but HMRC treats most transfers as disposals for Capital Gains Tax (CGT) and there are practical traps that can create surprise liabilities. This resource gives clear, actionable explanations and step-by-step checks to help readers understand how gifting crypto affects UK tax positions and what to do to reduce risk while staying compliant.
Key takeaways: gifting crypto in 60 seconds
- Most gifts are disposals for CGT, so a gain or loss is crystallised when crypto is sent as a gift (unless an exempt transfer between spouses/civil partners).
- Keep precise records: date/time, wallets/exchanges, transaction IDs, value in GBP at the time and a gift letter where possible. These items support HMRC enquiries.
- Recipients usually inherit the donor's base cost for future CGT calculations; recipients are rarely taxed on receipt unless income rules apply.
- Gifts can reduce inheritance tax (IHT) if they survive seven years and are properly structured, but rules differ for trusts and lifetime gifts.
- Charitable gifts to registered charities may give IHT relief and avoid CGT, subject to HMRC conditions; always obtain charity confirmation.
How gifting crypto affects capital gains tax in the UK
Why HMRC treats most transfers as disposals
HMRC guidance treats a disposal as any event where ownership changes or economic benefit is realised. Sending crypto from one wallet to another without a change of beneficial ownership (for example, moving between personal wallets) is not a disposal, but sending crypto as a gift to another person normally is because the donor parts with beneficial ownership. The key exceptions are transfers between spouses or civil partners living together, which are generally on a no-gain/no-loss basis.
How to calculate the gain when gifting crypto
A donor calculates gain as: proceeds (market value in GBP at time of gift) minus allowable costs (original cost, acquisition fees). For gifts there is no cash consideration, so the market value at the time of transfer is treated as the disposal proceeds. If the value has risen since acquisition, the donor may have a taxable gain and must consider their annual CGT exemption (annual exempt amount, indicative at time of writing — verify current limits on the HMRC site).
- Bought 1 BTC at £6,000; gifted when market value is £30,000. Disposal proceeds = £30,000; allowable cost = £6,000; gain = £24,000 (less any annual exemption and reliefs).
- Bought 1000 stablecoin units at £1 each; gifted at £1 each — likely no gain, but records still required.
Record-keeping and valuation when gifting crypto in the UK
What records to keep (minimum)
- Date and time (UTC) of the transfer.
- Transaction ID / TxHash and blockchain explorer link.
- From and to addresses (label the recipient).
- Value in GBP at the time (source: exchange price or reliable market snapshot) and method of valuation.
- Original acquisition details (date, cost, fees).
- Reason for transfer (gift letter, description).
Keeping these items reduces friction in tax reporting and supports valuation choices if HMRC queries arise. Useful sources for historic GBP valuations include exchange historic trade data or reliable price archives; always note the source URL.
Valuation methods and practical tips
- Use a reasonable market price at the time of the gift — an average of major exchanges is defensible.
- For illiquid tokens or NFTs, record the method (most recent arm’s-length sale, quoted marketplace price or independent valuation).
- Document why a chosen valuation was appropriate.
| Scenario |
How to value |
Notes |
| Liquid token (BTC, ETH) |
Spot GBP price on major exchange at timestamp |
Record exchange and exact time |
| Stablecoins |
Nominal face value unless depegged |
Note any deviation from par |
| NFTs / illiquid tokens |
Most recent arm's-length sale or independent valuation |
Attach valuation evidence |
- Export exchange CSVs and keep wallet export snapshots.
- Use reputable crypto tax software to aggregate transactions and produce reports (include a link to the export when filing).
- Keep a contemporaneous gift letter or memo stored with records.
How to transfer crypto as a gift (technical steps and checks)
Step-by-step transfer checklist (wallet-to-wallet and exchange-to-wallet)
- Confirm recipient address using multiple channels (message + separate verification).
- Send a small test transfer (micro amount) and confirm receipt.
- Record the TxHash and timestamp immediately.
- Capture GBP valuation at the time of the main transfer (screenshot or exchange API).
- Issue a gift letter or signed note stating donor, recipient, date, asset and brief reason.
Gift transfer checklist
✅ Step 1
Confirm recipient address → send test amount → verify
✅ Step 2
Record TxHash, timestamp and capture GBP price
✅ Step 3
Store gift letter, original purchase proof and valuation source
Gifting crypto: tax treatment for recipients
Does the recipient pay tax when receiving a gift?
Receiving a gift of crypto is not normally an immediate taxable event for the recipient under CGT or income tax, because the recipient did not provide consideration. However, recipients inherit the donor’s acquisition cost (base cost) and acquisition date for future CGT calculations. If the recipient later disposes of the crypto, their gain will be calculated against that inherited base cost.
Special situations where recipients may face tax
- If the gift is effectively payment for services, employment or benefits in kind, the recipient may have income tax or National Insurance implications — treat such transactions with caution.
- If the donor had given crypto at a time when the asset was deemed to be income in the donor’s hands (staking rewards, airdrops treated as income), separate rules apply at the donor level.
Using gifts to reduce inheritance tax on crypto
Lifetime gifts and the seven-year rule
Gifts made during lifetime may reduce the taxable estate for IHT if the donor survives seven years after making the gift (these are called potentially exempt transfers). There are caveats:
- Gifts into trust, gifts with reservation of benefit, and certain retained rights can invalidate the IHT advantage.
- Transfers between spouses are generally exempt for IHT where both are domiciled in the UK, but cross-border domicility can complicate treatment.
Practical considerations for crypto and IHT
- Crypto held on an exchange without clear segregation may be treated in estate valuations; ensure private keys or access instructions are recorded securely with professional estate planning.
- Document the gift carefully and consider professional advice when planning significant transfers intended to reduce IHT exposure.
Charitable crypto donations and HMRC rules in the UK
When a charitable gift avoids CGT and may give income tax relief
Donating crypto to a registered UK charity can avoid CGT on any gain and may qualify for additional income tax relief where the donor meets conditions. The charity must be a qualifying UK charity or a recognised overseas charity for reliefs to apply. Always obtain written confirmation from the charity of receipt and the value used.
Reliable guidance from HMRC is essential — reference the HMRC position on cryptoassets and donations: HMRC: Tax on cryptoassets.
Practical strategies to minimise tax when gifting crypto
Timing and use of allowances
- Use the donor’s annual CGT exemption before gifting high-gain assets.
- Consider spreading gifts across tax years to utilise both donor and recipient allowances (where applicable).
Use losses and matching rules
- Realising losses before gifting can offset gains elsewhere; however, avoid creating artificial arrangements solely to produce losses without genuine commercial rationale.
- Match disposals carefully to avoid unintentionally crystallising gains under the same-day and 30-day rules for share matching, where applicable by analogy to HMRC practice.
Splitting gifts and fractional transfers
- Splitting a large gift into smaller tranches across tax years may reduce immediate tax pressure and allow use of multiple annual exemptions, but record-keeping becomes more important.
When to involve a professional
- Estate planning, trust arrangements, cross-border gifts and high-value transfers typically warrant professional tax or legal advice. This content is informational and does not substitute regulated advice.
Balance strategic benefits and risks: gifting crypto can reduce IHT exposure and support family planning, but donors must accept potential immediate CGT consequences and the administrative burden of accurate valuation and records.
Analysis: when gifting crypto is most appropriate
Balance strategic: what is gained and what is risked with gifting crypto
- Benefits: potential IHT planning, family wealth transfers, charitable relief, simplification of holdings.
- Risks: immediate CGT liability for donors, complexity of proving valuation, recipient obligations when disposing later, and possible income tax consequences if the gift masks payment.
Cuándo es tu mejor opción (benefits of high impact) ✅
- Large expected future growth in an asset where donor wishes to remove future IHT exposure and expects to survive seven years.
- Donor has unused annual CGT exemption and gifting across tax years is feasible.
- Donations to registered charities where CGT relief applies and recipient charity confirmation is obtained.
Puntos críticos de fracaso (red flags) ⚠️
- Lack of reliable valuation evidence for illiquid tokens or NFTs.
- Transfers made without clear documentation (no TxHash, no gift letter).
- Gifting to avoid known debts or when benefit is retained by the donor (gifts with reservation of benefit).
Doubts quick questions about gifting crypto
How does gifting crypto affect my CGT bill?
A gift is usually a disposaI for CGT; the disposal proceeds are the market value in GBP at the time, so a gain may arise which the donor must report. Provide evidence of valuation and consider the annual exempt amount.
Why should records include the TxHash and GBP value?
The TxHash proves the transaction occurred and links to the exact timestamp; the GBP value shows the basis for CGT calculations and supports HMRC enquiries.
What happens if the recipient later sells the gifted crypto?
The recipient calculates any gain using the donor’s original acquisition cost (the recipient inherits the base cost) — the sale may create a CGT event for the recipient.
What if the transfer was to a spouse or civil partner?
Transfers between spouses/civil partners living together are generally on a no-gain/no-loss basis and should not trigger CGT at the time of transfer, subject to domicile and other rules.
How do charitable donations of crypto work for tax?
Donating crypto to a qualifying UK charity can avoid CGT on the donor’s gain and may also provide income tax relief; obtain written acknowledgment from the charity and keep valuation evidence.
Which valuation method is acceptable for NFTs?
HMRC expects a reasonable and evidenced approach — most recent arm’s-length sale, marketplace price or an independent valuation. Document the chosen method and supporting evidence.
Conclusion and next steps to take
Gifting crypto can be a legitimate and tax-efficient element of financial or estate planning, but it is not automatic tax-free. The donor must account for CGT where appropriate, keep contemporaneous and robust records, and consider IHT and recipient consequences. When decisions involve significant sums, illiquid assets, trusts or cross-border aspects, professional, regulated advice is advisable.
Start your checklist: first 10-minute actions
- Confirm whether the transfer is to a spouse/civil partner (often no immediate CGT) or to another person.
- Capture the recipient address and send a micro-test transfer; record the TxHash and timestamp.
- Take a screenshot of the GBP market price at the exact time and store a one-line gift memo (date, asset, recipient).
Legal notice: This content is informational and educational only. It does not constitute personalised tax, legal or financial advice. Readers should consult a regulated tax adviser, solicitor or accountant about their specific circumstances. For official HMRC guidance see HMRC.
