Bitcoin – New Inheritance Tax Problems?
The continuing decline in the price of Bitcoin and other cryptocurrencies has given many investors major worries. However, most investors probably haven’t thought about the Inheritance Tax consequences of holding cryptocurrency and what it might mean for their estate in the event they pass away.
Losses on the sale of shares and property during the administration of an estate usually attract relief from HMRC in the form of an Inheritance Tax refund if the relief is claimed in time when Inheritance Tax is applicable. However the same is not true for losses realised on the sale of cryptocurrency and many executors may not even realise that cryptocurrency is held by the estate.
Therefore, it is vitally important that investors in cryptocurrency make sure they put in place a Will, engage in Inheritance Tax planning and make sure their executors know about any cryptocurrency holdings.