Are gifts of Bitcoin or other crypto to family triggering tax forms, confusion or late penalties? For many people the uncertainty is the real problem: gifting feels simple but HMRC treats transfers, disposals and later sales differently. This page provides clear, practical answers so the reader can identify whether a gift to a spouse, child or relative must be reported, how to value it, what records HMRC expects and the possible Capital Gains Tax (CGT) and Inheritance Tax (IHT) consequences — without offering personalised tax advice.
Prepare to cut through complexity: concise rules, worked examples, form text ready for Self Assessment and a step‑by‑step checklist for any family crypto gift.
Executive summary: reporting gifts of crypto to family in 60 seconds
- When a gift is a disposed asset for CGT: Gifting crypto to anyone other than a spouse/civil partner is usually a disposal that may create a capital gain or loss.
- Spousal transfers are generally exempt: Transfers between spouses/civil partners living together are on a no gain/no loss basis for CGT.
- Reporting obligations: Disposals that create a taxable gain above the Annual Exempt Amount must be reported (Self Assessment SA108) or within 60 days if a UK residential property disposal — but not usually applicable to crypto).
- Valuation date matters: Value crypto at the exact date/time of the transfer using a reliable exchange price or average where necessary.
- Record keeping is essential: Transaction hashes, wallet addresses, screenshots, source of price, and evidence of receiving party must be kept for at least six years.
When to report crypto gifts to HMRC: quick rules and time limits
Basic rule: when a gift counts as a disposal
A gift of crypto is a disposal for Capital Gains Tax purposes if it is given to someone who is not a spouse or civil partner living together. That disposal is treated the same as selling the asset: the donor must work out the gain or loss as the difference between the asset's base cost (the donor's acquisition cost plus allowable costs) and the market value at the time of the gift.
- If the donor has a taxable gain above the Annual Exempt Amount (indicative £6,000 for 2025/26; check current HMRC figures), the gain normally must be reported on the donor's Self Assessment tax return (SA108).
- If the donor is not already required to complete Self Assessment, HMRC guidance explains how to report a capital gain; see HMRC: Tax on cryptoassets.
- There is no special 60‑day reporting rule for crypto unless the disposal involves UK residential property.
If the disposal creates a loss or the gain is below the Annual Exempt Amount, there will be no immediate tax bill; nonetheless the donor should keep records and include the disposal in any future Self Assessment if required.
Capital gains tax implications for family crypto gifts: calculations and examples
How to calculate gain on a gift
- Determine the donor's base cost (purchase price in GBP plus allowable costs like exchange fees).
- Establish the market value in GBP on the date/time of the gift (see valuation section).
- Gain = market value at gift date − base cost.
- If multiple disposals occur within the same tax year, apply HMRC pooling rules and allowable reliefs.
Worked example: adult gift to sibling
- Purchase: 1 BTC bought in 2019 at £5,000 (base cost).
- Gift date: 1 BTC transferred to sibling on 1 May 2026 when market value was £30,000.
- Gain: £30,000 − £5,000 = £25,000.
- If the donor's Annual Exempt Amount is £6,000 (indicative), taxable gain = £19,000. That must be reported on SA108 and will be taxed at the donor's CGT rate.
What happens if the recipient later sells the crypto
The recipient's base cost for future CGT is the market value at the date of the gift (the figure used to compute the donor's gain). When the recipient sells, any gain or loss is computed relative to that base cost.
Spousal transfers versus gifts to children: tax treatment compared
| Type of transfer |
CGT treatment |
IHT considerations |
| Between spouses/civil partners (living together) |
No gain/no loss: transfer at donor's base cost; no immediate CGT. |
Usually exempt; transfers are generally outside the IHT charge while both alive (but desktop exceptions apply for lifetime gifts with reservation). |
| Gift to children (adult) |
Disposal at market value: donor may have a CGT liability if gain exceeds allowance. |
Potentially a chargeable lifetime transfer for IHT if the donor dies within 7 years of the gift. |
| Gift to minor child (via guardian/custodian) |
Treated as disposal by the donor; additional rules apply if the asset is controlled by the donor post‑gift. |
Same IHT rules as other lifetime gifts; watch 'gift with reservation' if donor retains benefit. |
Additional notes on spousal transfers
Transfers on divorce or between non‑cohabiting ex‑partners do not get the no gain/no loss treatment. Transfers to spouses who are not UK‑resident may have specific rules; check HMRC residency guidance.
How to value crypto gifts for HMRC reporting: practical methods and examples
Valuation principles
HMRC expects a reasonable, evidence‑based valuation of the crypto in GBP at the time of the gift. Valuation must reflect the market value and be reproducible.
Acceptable valuation approaches
- Use the GBP price on a recognised exchange at the precise timestamp of transfer (preferred). Cite the exchange and the exact UTC time.
- If the token is low‑liquidity, use a weighted average across two or three reputable exchanges to reduce volatility distortion.
- For off‑chain transfers between wallets on the same platform, use the platform's GBP conversion rate at the time of transfer.
Example of valuation record
- Asset: 5 ETH
- Transfer timestamp: 2026‑06‑01 14:23:10 UTC (transaction hash: 0xabc...)
- Source price: Coinbase GBP spot £1,800 per ETH at 14:23:00 UTC
- Market value used: 5 × £1,800 = £9,000
- Evidence: screenshot of Coinbase price with timestamp, transaction hash, sender and receiver wallet addresses
Cite HMRC's general guidance at HMRC: Tax on cryptoassets for further detail.
Record‑keeping HMRC expects for crypto gifts to family: checklist and templates
Mandatory records to keep (at least six years)
- Transaction hash and blockchain explorer link.
- Sender and receiver wallet addresses and proof of ownership (e.g., screenshots of wallets, account emails).
- Date and UTC time of transfer.
- Market price source (exchange name) and screenshot showing the GBP price at the time.
- Calculation of base cost and gain with formula.
- Any correspondence showing the intention to gift (messages, emails) for larger transfers.
SA108 entry text template for Self Assessment
- For donors completing SA108, a short description for box entries can be: "Gift of 1.000 BTC to sibling on 01/05/2026. Market value £30,000. Base cost £5,000. Gain £25,000; taxable gain after annual exempt amount £19,000." Use this as start point; adapt to personal figures.
Checklist before completing the return
- Confirm whether the donor already files Self Assessment.
- Ensure total gains in tax year (all disposals) exceed Annual Exempt Amount.
- Attach calculations and retain records for at least six years.
Inheritance tax risks from large cryptocurrency gifts: what to watch for
Gifts and the seven‑year rule
Larger lifetime gifts may be treated as Potentially Exempt Transfers (PETs). If the donor dies within seven years of making the gift, the gift may become chargeable to IHT (taper relief can apply). See GOV.UK: lifetime gifts.
Gift with reservation of benefit
If the donor gives away crypto but continues to benefit from it (for example, continuing to control a custodial wallet), HMRC may treat the transfer as a gift with reservation, meaning the asset remains in the donor's estate for IHT.
Practical mitigation points
- Transfer both the asset and control (private keys/ownership) to the recipient.
- Keep contemporaneous evidence that control passed to the recipient.
- Consider professional advice for high‑value crypto gifts approaching the IHT nil‑rate band.
Worked scenarios: common family gifting situations and tax outcome
Scenario A — gifting 0.5 BTC to spouse who lives with donor
- CGT: No immediate CGT (no gain/no loss).
- Reporting: Not required as a disposal.
- IHT: Not a chargeable transfer between spouses (exempt).
Scenario B — gifting 1000 stablecoins to adult child
- CGT: Donor disposes at market value; usually negligible gain if stablecoin bought at parity, but small variations can create gain/loss.
- Reporting: Include in Self Assessment if combined taxpayers' gains exceed allowance.
- Records: Keep exchange screenshots and transfer hash.
Scenario C — gifting crypto to a custodial exchange account in child’s name but donor retains account control
- Risk: May be treated as gift with reservation. IHT risk if donor dies within seven years.
- Action: Transfer to recipient‑controlled wallet and keep proof.
Balance strategic: what to gain and what to risk with reporting gifts of crypto to family
When it is a good option (benefits of gifting crypto)
- ✅ Reduces size of donor's estate for IHT planning if control fully transfers.
- ✅ Transfers wealth conveniently without bank transfers or conversion.
- ✅ Can pass assets that may grow in value out of an estate (tax planning).
What to watch (red flags and pitfalls)
- ⚠ Donor failing to value or report disposals, leading to penalties.
- ⚠ Retaining control of wallets — this increases IHT exposure.
- ⚠ Poor record keeping (no screenshots, missing timestamps) — evidence disputes can be costly.
Reporting flow: gift a crypto asset to a family member
🔎 Step 1 → Confirm recipient status (spouse/civil partner or other)
🧾 Step 2 → Record transfer details: hash, timestamp, wallet addresses, exchange price
🧮 Step 3 → Calculate gain/loss (market value at transfer − base cost)
📝 Step 4 → Report on Self Assessment (SA108) if taxable gain exceeds Annual Exempt Amount
✅ Success: Records stored for six years and recipient has clear base cost for future disposals
Practical checklist: preparing to report a family crypto gift in Self Assessment
- Confirm whether the donor must complete Self Assessment in the tax year of the gift.
- Gather proof: transaction hash, timestamps, exchange price screenshots, wallet addresses, evidence of intended gift.
- Compute total capital gains for the tax year and check against the current Annual Exempt Amount (indicative figures change annually).
- Use the SA108 supplementary pages: enter the gain, supply asset description and date. For guidance on SA108 see GOV.UK: Self assessment capital gains (SA108).
Doubts quick answers about reporting gifts of crypto to family
How to prove a wallet transfer was a gift
A gift is best proven with contemporaneous evidence: written instruction, messaging confirming intention, transaction hash and wallet screenshots. Contextual proof reduces disputes.
Why does HMRC care about the valuation date
HMRC taxes gains based on market value at the time of disposal. Crypto volatility means minutes can change the taxable figure considerably; the timestamp justifies the valuation used.
What happens if the donor forgets to report a gain
HMRC penalties and interest can apply for late reporting or under‑reported tax. Voluntary disclosure and corrected returns reduce penalties. For specifics consult HMRC.
Which records are most persuasive to HMRC
Transaction hash, blockchain explorer link, exchange/price screenshot with timestamp, and clear evidence of recipient are most persuasive.
How is a custodial exchange transfer treated
If the transfer changes beneficial ownership and control to the recipient, it is a disposal. If the donor retains effective control, HMRC may view it as a retained benefit.
Conclusion: lasting benefits of accurate reporting and simple next steps
Correct reporting of family crypto gifts reduces future disputes, clarifies tax positions for both donor and recipient and mitigates IHT risk. Consistent valuation and robust record keeping protect against penalties and make later sales by recipients straightforward.
Three practical steps to take in the next 10 minutes
- Note the exact UTC timestamp of the gift and copy the transaction hash into a secure document.
- Take a screenshot of the GBP price on a recognised exchange at the transfer time and save it with the screenshot filename including date/time.
- Create a simple CSV row: donor name, recipient name, asset, amount, timestamp, market value used, base cost, transaction hash; store with other tax records.
