Crypto Gift Tax UK: Spouse Transfers, Family Gifts and IHT Planning

Giving crypto to family is one of the few areas of UK tax where the rules are genuinely favourable — but only for spouses and civil partners. Everyone else is treated as a market-value disposal, and if you die within seven years of a gift, Inheritance Tax comes back into scope. Here is how to plan a crypto gift properly.

Rule 1: spouse and civil partner — TCGA 1992 s.58

A transfer of crypto between spouses (or civil partners) who are living together is treated as a "no gain, no loss" disposal. The recipient inherits the transferor's Section 104 cost basis; no CGT is due at the moment of transfer.

- **Practical effect:** you can move gains from a higher-rate-earning spouse to a basic-rate-earning spouse before disposal, halving the CGT rate on part of the gain (see <a href="/blog/crypto-tax-basic-vs-higher-rate-uk">18 vs 24 percent</a>). - **You must actually transfer beneficial ownership.** Merely sending crypto to a wallet controlled by your spouse in name only is not enough — HMRC will look at who benefits from the disposal proceeds. - **The AEA is per person, £3,000 each.** A married couple has £6,000 of combined allowance if both dispose. - **"Living together" means not permanently separated.** Separation before decree absolute breaks the s.58 treatment.

CryptoLens supports spouse transfers via <a href="/household">/household</a> — set up two linked accounts and mark transfers as s.58, and the tool preserves the cost basis correctly.

Rule 2: anyone else — market value at gift date

Gifts to children, parents, siblings, friends or unrelated parties are treated as disposals at market value on the gift date, under TCGA 1992 s.17. That means:

- The donor has a taxable disposal at the market value of the transferred crypto on that date, using their Section 104 pool cost basis. - The recipient acquires at that same market value — this becomes their new cost basis. - The donor pays CGT (subject to AEA) at 18 or 24 percent per their band.

Example: parent transfers 1 ETH to adult child. ETH was in the parent's Section 104 pool at £800 cost basis; market value on the gift date is £3,200. The parent has a £2,400 gain, £3,000 AEA covers it if there are no other disposals, otherwise CGT is due. The child now has 1 ETH with a £3,200 cost basis.

Rule 3: connected persons special valuation

If you gift to a "connected person" (broadly, close family other than spouse — parents, children, siblings, and their spouses — plus companies you control), the transaction is at market value regardless of what you actually charged. You cannot avoid CGT by selling ETH to your brother for £1 — HMRC will impute market value.

Rule 4: gifts to charity

Gifts of crypto to a registered UK charity qualify for the same relief as gifts of shares under section 431 of ITA 2007 and TCGA 1992 s.257. Two benefits:

- **No CGT** on the disposal, even if the crypto is standing at a gain. - **Income tax relief** on the market value of the gift at your marginal rate.

The charity must be able to receive crypto and must issue a receipt at market value. See <a href="/blog/crypto-donations-charity-tax-uk">crypto donations charity tax UK</a> for the mechanics.

Inheritance Tax on gifts (the 7-year rule)

Gifts of crypto to individuals are Potentially Exempt Transfers (PETs). If the donor dies within seven years of the gift, the gift is added back to the estate for IHT purposes, potentially triggering IHT at up to 40 percent on any excess above the £325,000 nil-rate band (plus £175,000 residence nil-rate band where applicable).

Taper relief reduces the IHT liability on gifts made 3 to 7 years before death:

- 0 to 3 years: full IHT at 40 percent on the excess. - 3 to 4 years: 32 percent. - 4 to 5 years: 24 percent. - 5 to 6 years: 16 percent. - 6 to 7 years: 8 percent. - 7+ years: nil.

Taper relief only kicks in if the gift itself exceeds the nil-rate band — for most family gifts of crypto (well below £325k) the taper is academic; the gift falls under the nil-rate band and no IHT is due unless the estate as a whole exceeds thresholds.

See <a href="/blog/crypto-inheritance-tax-uk">crypto inheritance tax UK</a> for full estate planning including how to leave wallet access.

Gifts to minor children

Gifts to a child under 18 face two extra complications:

- **Beneficial ownership.** The gift must be held on bare trust for the child; the parent should not retain control except as trustee. If not, HMRC's settlements legislation can attribute any subsequent income back to the parent. - **Recipient becomes taxpayer at 18.** Any subsequent disposal by the child (or by the trustee on their behalf) is a CGT event with the child's own AEA and rates.

Documenting a gift

HMRC accepts contemporaneous evidence. A dated note stating "on 12 December 2026 I gifted 0.5 ETH to Jane Smith at market value of £X", plus the on-chain transaction record, is sufficient. For larger gifts, get it in writing with a signed declaration. Keep for six years past the filing deadline (or seven years for IHT purposes).

Filing pipeline

1. Mark the gift disposal in <a href="/tax">/tax</a> as a "gift" — the tool uses market value on that date rather than actual proceeds. 2. For spouse transfers, use <a href="/household">/household</a> to link the two accounts and preserve cost basis. 3. Report the disposal on SA108 in the normal way. For gifts to charity, claim the relief on SA100. 4. For very large lifetime gifts (approaching the £325k nil-rate band), get IHT-focused advice. CryptoLens tracks the value; an estate planner tracks the strategy.