Gifting Crypto in the UK: Tax Rules for Giving and Receiving

Giving crypto as a gift triggers different tax rules depending on who receives it. Understanding these rules can help with tax planning, especially between spouses.

Gifts to individuals (not spouse)

If you gift crypto to anyone other than your spouse or civil partner, HMRC treats it as a disposal at market value. You must calculate CGT as if you sold the crypto at its current market price, even though you received nothing in return. The recipient's cost basis is the market value at the time of the gift.

Spousal transfers

Transfers between spouses and civil partners are exempt from CGT. The receiving spouse takes on the original cost basis — the amount the giving spouse originally paid. This creates a valuable tax planning opportunity: you can transfer crypto to your partner to use their £3,000 annual exemption, potentially sheltering £6,000 of gains per year as a couple.

Inheritance

When someone dies, their crypto is subject to Inheritance Tax (IHT) if their total estate exceeds £325,000 (the nil-rate band). The crypto is valued at market price on the date of death. For CGT purposes, the beneficiary's cost basis is the market value at the date of death — any gains that accrued during the deceased's lifetime are effectively wiped out. This is known as the CGT uplift on death.

Charitable donations

Donating crypto to a registered charity is exempt from CGT. You can also claim Gift Aid if the charity can reclaim tax on it. Some UK charities now accept crypto donations directly. If you have tokens with large unrealised gains, donating them can be more tax-efficient than selling, paying CGT, and donating the proceeds.

Practical tax planning

The spousal transfer exemption is the most accessible planning tool. If one partner has used their £3,000 allowance and the other has not, transferring crypto before selling can halve your tax bill. For larger amounts, gifting into a trust or to charity may be worth discussing with a tax advisor.

Always keep records of gifts — the date, token, amount, and market value — as HMRC may query transfers between wallets.