- Crypto counts in your estate for inheritance tax at its value on the day you die, and since January 2026 UK exchanges report their customers to HMRC, so it will be counted.
- The tax system can reach your coins; your family often can’t. Keys die with their holder unless you plan, and a must never go in a will: wills become public documents after probate.
- The minimum plan costs nothing: make sure someone knows the crypto exists. This page covers England and Wales.
Somewhere around one in ten of all the bitcoin that will ever exist is thought to be lost for good, much of it because someone died, and the keys died with them. Crypto is the only mainstream asset with this property. A forgotten bank account eventually surfaces; a share certificate can be reissued; a house does not vanish because nobody can find the deeds. Coins secured by a key nobody living knows are gone in a way the legal system cannot reverse, no matter what a will says.
That creates a genuinely strange situation for UK families: the taxman can count coins that nobody can reach. Inheritance tax is charged on what you owned at death, not on what your executors manage to recover; HMRC’s own manual tells executors to declare crypto they know exists but cannot access, with an explanation and an estimate. Wales has already produced the world’s most famous cautionary tale: James Howells’ hard drive holding the keys to roughly 8,000 bitcoin went to a Newport landfill in 2013, and in January 2025 the High Court struck out his claim against the council: the moment it hit the tip, the law says, it became the council’s property.
This guide covers both sides of the problem: what the law and the tax rules actually say, and the practical planning (some of it free) that stops your coins joining the landfill statistics. It is education, not advice; for a large estate, a solicitor who knows digital assets is money well spent. The link marked Ad on this page earns us a commission, and it did not change the recommendation.
What the law now says
Start with the good news: the legal status of crypto in the UK is now settled. The Property (Digital Assets etc) Act 2025, in force since December 2025, confirms in statute that digital assets can be objects of personal property rights, which means crypto can be owned, held on trust, recovered through the courts, and inherited, exactly like other property.
For inheritance tax, HMRC’s cryptoassets manual is blunt: coins are assets of your estate like bank accounts, shares or property, valued in sterling at the date of death. The usual machinery applies: the first £325,000 of an estate is tax-free (plus up to £175,000 more when a home passes to children or grandchildren), anything you leave to a spouse or civil partner is exempt, and the rate above the thresholds is 40%. Those thresholds have been frozen since 2009 and are now frozen until April 2031, while crypto portfolios and house prices have not been; and from April 2027 unused pension pots join estates for inheritance tax too. Estates that never used to think about this tax increasingly need to.
There is one small mercy and one nasty catch. The mercy: there is no capital gains tax on death. Your coins pass to your estate at their date-of-death value, and that becomes the beneficiary’s cost for any future sale: the gains of your lifetime die with you, untaxed. The catch: if the market crashes between the death and the sale, the special relief that lets an estate reclaim inheritance tax on shares sold at a loss does not apply to crypto. HMRC’s manual says so explicitly. The estate pays tax on the date-of-death value even if the coins are worth half that by the time probate ends: a real timing risk in an asset this volatile.
The problem the law cannot fix
None of that machinery moves a single coin. Whoever holds the keys holds the crypto, and the courts can declare ownership all day without changing it.
The famous cases are famous for a reason. When the founder of Canadian exchange QuadrigaCX died suddenly in 2018, he was apparently the only person holding the exchange’s keys, and 76,000 customers lost access overnight; investigators later found the deeper problem was that much of the money was already gone, but the lesson about one-person key control stood. Stefan Thomas, a former Ripple executive, has spent years locked out of 7,002 bitcoin on an encrypted USB stick with two password guesses remaining; at last report it was still locked. And Howells’ 8,000 bitcoin sit under a Welsh landfill that the council now plans to cap and close.
Analysts estimate that between two and four million bitcoin are permanently unreachable: estimates, not counts, but the direction is not in doubt. The uncomfortable truth for anyone who holds their own keys is that ’s greatest strength (nobody else can touch your coins) is precisely what makes dying without a plan so expensive. Our self-custody guide makes the same point from the other direction.
Planning that works
The golden rule first: never put a , or password in your will. After probate is granted, a will becomes a public document: anyone can order a copy from the Probate Registry for a few pounds. A will that contains your seed phrase is a treasure map with a government-issued index. The will’s job is to say who gets the crypto; how to reach it lives somewhere else.
Here is the ladder, from free to serious:
| Level | What you do | What it protects against |
|---|---|---|
| Minimum | Tell one trusted person the crypto exists and roughly where: which exchanges, that there’s a hardware wallet in the house. No keys, no amounts if you prefer. | The commonest failure of all: heirs who never knew, executors who never looked. Free and takes five minutes. |
| Better | Write an inventory and access instructions (what exists, where the device and backup are, what to do and who to call) and store it with your solicitor or somewhere genuinely secure, referenced by (but separate from) your will. Update it when things change. | Executors finding the assets but not knowing how to reach them safely, or falling for “recovery services”. Keeps everything out of the public record. |
| Stronger | Split your seed backup so no single place or person holds it all: Trezor devices support multi-share backups (for example 3-of-5 shares across locations and people) as a built-in feature. Ledger devices have no inheritance feature, so Ledger holders need one of the other routes. | Fire, theft, and the single point of failure: one share leaking gives a burglar nothing, one share burning loses nothing. |
| Serious money | A multisig inheritance service: Casa and Unchained both run schemes where coins need multiple keys, the company holds one, and it is released to verified heirs on proof of death. Paid subscriptions, real contracts, and a real catch for us: both are American operations built around American customers, and Unchained’s range is designed around US retirement accounts. Check they will take a UK client, and that their inheritance verification is open to you here, before you plan around either. | Everything above, plus heirs who are not technical: the service walks them through recovery instead of leaving them alone with a seed phrase. |
If the multi-share route appeals, it is built into Trezor devices rather than bolted on, and it is the main reason Trezor wins the inheritance question in our head-to-head.
Our budget pick of the category. Buttons rather than a touchscreen, and the same security architecture as its bigger sibling.
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Whichever level you pick, pair it with an ordinary, well-drafted will. Without one, the intestacy rules decide who inherits, and they are harsher than most people think.
If there is no will
In England and Wales, intestacy hands everything to a fixed list: a surviving spouse or civil partner takes the personal possessions, the first £322,000 and half of the rest, with children sharing the other half; with no spouse it runs down a strict order of relatives. Two things catch crypto holders in particular. First, an unmarried partner inherits nothing under intestacy, however long you have been together; their only route is a court claim, which is slow, uncertain and expensive. Second, the rules can hand your coins to a relative who has no idea what a seed phrase is. If either of those outcomes sounds wrong to you, that is the argument for a will in one sentence. (Scotland and Northern Ireland have different rules; this page covers England and Wales.)
If you are the executor
Working the other side of the problem: someone has died, and you think there is crypto.
Find it. Bank statements are the best index: transfers to and from exchanges name the exchange. Then: emails from exchanges, apps on the phone, hardware wallets in drawers (they look like USB sticks), metal or paper seed backups, password managers, and anything the deceased’s access instructions point to. HMRC’s own guidance tells executors to make these checks.
Value it and declare it. Sterling value at the date of death, on the inheritance tax return (it goes in the “other assets” box; HMRC wrote to advisers this year specifically because crypto keeps being left off). There is no prescribed method for the valuation; taking the price from a major exchange at the date of death, or an average across a few, and keeping your workings is standard practice. If you know coins exist but cannot reach them, you must still declare them, with an explanation and an estimate; HMRC can revisit if they are recovered later.
Getting exchange accounts released is more orderly than people expect. Kraken’s process asks for the death certificate, the grant of probate or letters of administration, the representative’s photo ID and a signed instruction letter; Coinbase’s asks for essentially the same package and typically takes a few weeks. Neither supports naming a beneficiary in advance: the account passes through the estate like everything else.
Mind the timing risk. Because the loss-on-sale relief does not cover crypto, an estate holding volatile coins is carrying unhedged exposure between death and distribution. Executors should decide deliberately (sell during administration or transfer coins to beneficiaries in specie) rather than drift, and record why.
Common questions
Does HMRC actually know about crypto in estates?
Increasingly, yes. Since January 2026, UK crypto platforms collect and report customer details and transactions to HMRC under an international reporting framework, and HMRC has been writing to tax agents reminding them that crypto belongs on inheritance tax returns. Assume visibility. The days of crypto as an invisible asset are ending quickly.
Can I just give my coins away before I die?
You can, but two taxes apply, not one. Giving crypto to anyone other than your spouse is a disposal for capital gains tax at that day’s market value: tax now, potentially, on gains you never cashed in. For inheritance tax, the gift generally leaves your estate only if you survive it by seven years. Gifts can still be excellent planning; they are just not the free escape hatch people assume.
What happens to coins nobody ever finds?
, nothing: they sit at their address forever, visible and untouchable. Legally they remain part of the estate; practically, if no key or backup survives, they join the millions of coins already permanently out of circulation. There is no central authority to petition and no reset process. That permanence is the whole design.
Should I use one of those “crypto will” services or write my seed phrase somewhere clever?
Be careful. The vetted end of this market (the multisig inheritance schemes) is real and works. But “clever” home-made schemes (splitting a phrase in half between two envelopes, riddles for your heirs, encrypted files with the password “somewhere safe”) mostly add failure modes rather than remove them. The boring version (solicitor-held instructions plus a proper backup) beats the ingenious version almost every time.
Checked against HMRC’s cryptoassets manual, legislation and the exchanges’ published processes in August 2026. This page is reviewed on a schedule and updated when the rules change. It is education, not legal or tax advice; estates with serious money in crypto should pay for an hour with a solicitor who knows digital assets. There are no affiliate links on this page; if that ever changes it will be disclosed here, in line with our affiliate disclosure and editorial policy.