Are concerns about how remittance rules affect non‑dom crypto holdings blocking plans to hold or move offshore Bitcoin? This guide gives actionable rules, HMRC citations and a clear checklist to decide when a transfer of crypto counts as a remittance to the UK and what that means for tax.
Key takeaways: what to know in one minute
- Remittance means bringing value to the UK: any transfer, conversion or use that brings economic benefit to the UK can trigger tax on previously offshore income or gains. Remittance & non-dom crypto are treated on this basis.
- Claiming the remittance basis requires care: non‑doms who use the remittance basis must show that crypto income/gains remained offshore and that any transfer into the UK was not a remittance or was taxed on arrival.
- On‑chain transfers, exchanges and custodians matter: moving Bitcoin between wallets, custodial providers or exchanges can create remittances if value is realised or used in the UK.
- Tax type depends on facts: remitted crypto can be taxed as income (e.g. staking rewards, airdrops) or capital gains (disposal of Bitcoin) depending on the source and HMRC guidance.
- Document everything: tx hashes, exchange statements, withdrawal timestamps and correspondence are essential to defend a remittance position.
How remittance rules affect non-domiciled crypto holdings
Non‑domiciled UK residents who rely on the remittance basis must treat offshore crypto similarly to other offshore assets. The central test is whether an offshore income or gain has been "brought into" the UK as a remittance. For crypto this can occur in several ways:
- On‑chain transfer to a UK address or custody provider where the recipient is in the UK or the private keys are held in the UK.
- Conversion to fiat and deposit into a UK bank account — classic remittance.
- Use of remitted crypto to pay for UK goods or services (for example, buying property or paying a UK‑based supplier after converting on an exchange that settles in sterling).
HMRC treats the economic benefit rather than the technical location alone. If the owner or a connected person accesses the value in the UK, that will often be a remittance. See HMRC cryptoassets manual and tax on cryptoassets guidance: HMRC: tax on cryptoassets and HMRC cryptoassets manual.
How "bringing value to the UK" is often tested in crypto cases
- Actual receipt of fiat in the UK — highest risk of remittance.
- Payment via a UK payment processor after conversion — treated as a remittance when the UK benefit is received.
- Physical transfer of private keys to a UK custodial provider — likely treated as remittance if control transfers to a UK entity.
Cryptocurrency remittance basis: claiming and common pitfalls
Claiming the remittance basis requires a clear record that income/gains remained offshore and that any UK benefit is either taxed or demonstrably not a remittance. Common pitfalls specific to crypto include:
- Assuming on‑chain anonymity protects remittance status. On‑chain evidence (tx hashes, timestamps) can show movement and link to exchanges that convert to fiat.
- Failing to prove where custody effectively lay. HMRC considers where control and beneficial ownership sit, not the nominal country of a wallet.
- Ignoring associated persons. Remittances by family members, trustees, or connected entities can still trigger tax for the taxpayer.
Practical steps when claiming the remittance basis for crypto
- Maintain a contemporaneous ledger of every transaction with dates, tx hashes and counterparty details.
- Keep exchange withdrawal and deposit statements showing fiat rails and destination bank accounts.
- Record custodial agreements and terms that show where custody and control are exercised.
- Annotate transfers that were purely technical (e.g. change addresses, chain reorganisation) and keep supporting evidence.
HMRC guidance on offshore Bitcoin and remittances
HMRC’s position is published in the cryptoassets manual and related guidance collections. Key points:
- HMRC applies existing tax principles (income tax, CGT, remittance basis rules) to crypto; the technology does not change the legal tests.
- Location tests focus on control, disposal and economic benefit rather than a token's nominal ledger location.
- Where crypto is converted to fiat or used to buy goods/services in the UK, HMRC will treat that as a remittance unless proven otherwise.
Cite relevant pages:
- HMRC cryptoassets manual: cryptoassets manual
- HMRC collection: tax on cryptoassets guidance
What recent policy changes (post‑2025 FIG regime) mean for non‑doms
Since the FIG regime changes from April 2025, reporting and classification for foreign income and gains have become more granular. Non‑doms should note increased HMRC scrutiny, especially where on‑chain evidence links to fiat rails or UK beneficial use. Legal advice is recommended for borderline cases.
Capital gains versus income tax for remitted crypto
Tax treatment of a remitted crypto amount depends on its nature at source.
- Capital gains: arises when a disposal occurs (e.g. selling Bitcoin on an exchange for fiat). If the disposal happened offshore and the proceeds are then remitted to the UK, non‑doms using the remittance basis may be taxed on the remitted gain.
- Income tax: applies to rewards, staking, mining, airdrops or where activity amounts to trading. If such income is earned offshore but remitted, it can be taxed on remittance.
Determining whether a receipt is trading income or a capital gain requires a facts‑and‑circumstances test (frequency, scale, intention). For example, frequent active trading with businesslike systems may lean towards income.
Example: numerical before/after remittance (illustrative)
- Offshore disposal gain: £100,000 (realised on an offshore exchange)
- Proceeds remitted to UK bank account: £100,000
- If remittance basis is claimed but this is a remittance, the £100,000 gain may be subject to UK CGT at prevailing rates after any annual exemption.
By contrast, if £100,000 of staking rewards are earned offshore and remitted, those would be subject to income tax rates when remitted.
Practical compliance: reporting, AML checks and disclosures
HMRC expects accurate self‑assessment reporting. For non‑doms this means:
- Report all remitted offshore income or gains if using the remittance basis only for amounts left offshore.
- Disclose the nature of the crypto (gain vs income), dates of disposal, exchange names, tx hashes and amounts.
- Keep AML/compliance records from custodians and exchanges to show where and when funds were converted.
Banks and exchanges increasingly perform AML checks: KYC and proof of source for large deposits. These records can support a non‑dom’s position or, conversely, create a trail showing remittance occurred.
Reporting checklist for remitted crypto
- SAR‑style timeline of events with tx hashes and timestamps
- Exchange withdrawal receipts and bank credit advices
- Custodian contract pages showing jurisdiction and control
- Correspondence with exchanges or brokers
Cross-border transfers: exchanges, wallets and required documentation
Not all transfers equal remittance — documentation often decides the outcome. Useful documents include:
- Exchange account statements showing trade, withdrawal and counterparty settlement.
- Bank statements confirming receipt of fiat in a UK account.
- Wallet export files (e.g. private key handover proof), custody agreements and proof of where private keys are stored.
Comparative table: typical scenarios and likely remittance outcome
| Scenario |
Typical tax consequence |
Evidence that matters |
| Convert offshore BTC → fiat and transfer to UK bank |
High risk of remittance (CGT or income) |
Exchange withdrawal + UK bank credit + timestamps |
| Move BTC from offshore wallet A to offshore wallet B with no fiat conversion |
Low risk if truly offshore |
tx hash + proof wallets controlled offshore |
| Deposit BTC with a UK custodial provider |
Likely remittance if control passes to UK |
Custody agreement + onboarding KYC |
| Pay UK supplier via crypto (converted by UK processor) |
Remittance for amount used |
Processor receipts + supplier invoice |
| Send BTC to family member in UK |
Potential remittance if family is connected person |
Transfer records + relation evidence |
How to prove a transfer was not a remittance
Remittance evidence flow for offshore crypto
📄
Step 1 → collect on‑chain proof (tx hashes, block confirmations)
🏦
Step 2 → gather exchange & bank statements showing no UK receipt
🔐
Step 3 → confirm custody jurisdiction (agreements, KYC)
✉️
Step 4 → prepare a timeline & analyst notes to explain intent
✅
Success → consolidated file for a tax position or HMRC review
When to apply remittance planning and when to avoid it: benefits, risks and common errors
✅ Benefits / when applying remittance planning makes sense
- Preserves tax-free status for offshore income left genuinely offshore.
- Useful for large unrealised gains where converting or remitting would trigger unnecessary UK tax.
- Works where strong custody and documentary separation from the UK can be evidenced.
⚠️ Errors to avoid / risks
- Treating on‑chain transfers to UK custodians as technical rather than substantive.
- Failing to consider connected persons and indirect routes of remittance.
- Inadequate record keeping for exchanges or custodians that can link transfers to UK use.
How to prepare for an HMRC enquiry on remitted crypto: a how-to checklist
- Export and timestamp all on‑chain transactions (tx hashes, block heights).
- Obtain exchange API history, withdrawal receipts and fiat settlement records.
- Collect bank statements showing absence of credit for suspected remitted amounts.
- Secure custody contracts clearly stating jurisdiction and control terms.
- Prepare a plain‑English timeline tying evidence to the taxpayer's position.
Questions frequently asked about remittance & non-dom crypto
What counts as a remittance for crypto?
A remittance is any action that brings the economic benefit of offshore income or gains into the UK — conversions to fiat and use to buy UK services are common examples.
Is moving crypto on‑chain between wallets a remittance?
Not necessarily; it depends on where control and beneficial ownership lie and whether the transfer results in UK economic benefit.
Does staking income earned offshore become taxable if kept offshore?
If staking income remains offshore and is not brought to the UK, it may remain outside UK tax under the remittance basis. If it is used or converted and brought to the UK, it can be taxed on remittance.
Can exchange KYC records force HMRC to treat a transfer as a remittance?
Exchange and bank KYC records can provide evidence of where funds were settled; they often form part of HMRC’s enquiries and can undermine an offshore position if they show UK receipt.
Is transferring crypto to a UK friend a remittance?
Potentially yes — transfers to connected persons in the UK can be treated as remittances if the economic benefit ends up in the UK.
How long should records be kept for remittance claims?
HMRC recommends keeping tax and transaction records for at least six years; for complex offshore crypto matters, keeping longer records is prudent.
Your next step:
- Compile a chronological export of all crypto transactions including tx hashes, exchange statements and bank receipts.
- Mark each transfer: offshore non‑remittance, potential remittance, or remitted — gather evidence for each.
- If any position is borderline, obtain specialist tax advice and consider voluntary disclosure options.