Cryptocurrency Part 2 - Probate

This article is designed to be a basic guide for the executors or personal representatives of the deceased’s estate.

Identifying crypto assets

If you are the executor or the personal representative of a deceased’s estate and you know that the deceased owned crypto assets but can’t find a digital inventory or a cryptocurrency access guide, then you could arrange for an expert to search the deceased’s computing devices for any cryptocurrency wallets and account details.

If the deceased made arrangements using a third-party provider to hold the cryptocurrency, then you should write to the provider providing them with a death certificate and the grant of probate in order to obtain access to the deceased’s account.

Possession of crypto assets

Once you obtain possession of the crypto assets then those should be transferred to a new wallet or a custodian controlled by them, and a new private key should be created that only you know. In general, you should take extreme care to secure any information you obtain regarding the crypto assets.

Distributing crypto assets

Your duty as an executor or personal representative of a deceased’s estate is to assess, value and distribute crypto assets according to the terms of the will or intestacy rules.
How you distribute crypto assets depends on the will or the intestacy rules. You could either transfer the crypto assets directly to the relevant beneficiaries or sell them and distribute the proceeds of the sale to the relevant beneficiaries.

If you wish to sell the crypto assets, then it is wise to liaise with a specialist broker.

Tax on crypto assets

As part of the estate, crypto assets are treated according to the normal rules on inheritance tax, therefore, crypto assets are subject to inheritance tax at a tax rate of 40% on the death of the owner and capital gains tax on a valid disposal of the same.

There is no tax relief for crypto-assets.

If you would like to know more about the process of administering crypto-assets in an estate, including the tasks of assessing and valuing of the digital assets, then please contact a member of our Wills, Trusts and Probate department on 020 8492 2290 or email us at sols@gnlaw.co.uk.