HMRC’s cryptoassets manual explains that cryptoassets are property for the purposes of IHT (CRYPTO25000). HMRC is concerned that some agents may not fully understand the implications of this, leading to errors in, or the non-filing of IHT returns. The objective of the letter is to strengthen agents’ knowledge of the IHT treatment of cryptoassets and to improve awareness of the issue among both agents and personal representatives. 

Cryptoassets may create unique issues where the private key has been lost or not passed on. Valuation issues may also arise where the value of the cryptoassets has fallen since the date of death, as there is no specific fall-in-value relief (as there is for land and shares). 

HMRC has indicated that it does not intend to seek penalties for amendments regarding cryptoassets made in response to this campaign. HMRC may apply penalties if returns are not amended and HMRC subsequently opens an enquiry and identifies underpaid tax.  

The taxation of cryptoassets is coming under increased scrutiny. For further information on: 

• the taxation of crytpoassets in general, listen to the podcast Taxing times: cryptoassets in the spotlight | ICAEW;
• the key points for individuals, see TAXguide 01/2024;   
• guidance on completing the capital gains tax pages of the self assessment tax return for 2024/25, see the article CGT tips for 2024/25 tax returns | ICAEW; and
• the cryptoasset reporting framework, which will begin to be implemented in the UK from January 2026, see the article What’s CARF got to do with it? | ICAEW .