Don’t be cryptic about your cryptoassets

HMRC is reminding agencies that cryptoassets fall within the definition of property for the purposes of Inheritance Tax (IHT) and must be included in the tax return calculation along with the usual cash, stocks, shares, land and buildings. 

Cryptoassets, also known as cryptocurrencies, are digital or virtual representations of value (or rights). They are therefore not tangible assets and cannot be physically touched. Examples include Bitcoin, Ripple, Litecoin and Ethereum. The sending and receiving of these assets can be completed without an intermediary such as a bank and this is one of the appeals for users. There is, however, currently no financial institution or government regulation over cryptoassets. 

Despite “crypto” quite literally meaning “hidden” or “secret” in Latin, these assets should not be withheld from HMRC when completing the IHT400 form. HMRC’s reminder letter encourages agents to confirm with clients if the respective deceased held any cryptoassets. If a tax return has already been submitted without noting such assets, Corrective Accounts will need to be supplied to HMRC. 

HMRC has indicated it will not be issuing penalties for amended returns made in response to the letter. However, if it later finds tax has been underpaid and a Corrective Account has not been filed, it may impose a penalty. 

For personalised inheritance tax planning advice, please contact experienced our Private Client team to review your position and ensure full compliance with HMRC’s expectations.

HMRC is writing to agents who have previously submitted inheritance tax (IHT) returns to raise awareness of the requirement to account for IHT on cryptoassets. Any returns that contain an error should be corrected.

https://www.icaew.com/insights/tax-news/2025/dec-2025/agents-may-be-overlooking-iht-on-cryptoassets