Gifting crypto to another person is treated as a disposal by HMRC. The gift is subject to Capital Gains Tax based on the market value at the time of transfer.
The Basic Rule
| Event | Tax Event |
|---|---|
| Gift crypto to someone | Disposal at market value |
| Recipient receives crypto | No tax (acquisition) |
| Recipient sells later | CGT on gain from gift value |
| Gift to spouse/civil partner | No gain/no loss |
Gift to Spouse or Civil Partner
| Aspect | Rule |
|---|---|
| CGT | No gain/no loss transfer |
| Cost basis transfers | Recipient inherits your original cost basis |
| Frequency | No limit |
| Tax planning | Can use both allowances effectively |
This is the most tax-efficient way to gift crypto.
Gift to Anyone Else
| Aspect | Rule |
|---|---|
| CGT | Disposal at market value |
| Gain/loss | Market value minus your cost basis |
| CGT allowance | £3,000 (2025-26) applies |
| Recipient’s cost basis | Market value at time of gift |
Example: You bought 1 BTC for £20K. You gift it when it’s worth £50K. You have a £30K gain to report (minus your CGT allowance).
Annual Exemption
| Gift Type | Exemption |
|---|---|
| CGT allowance | £3,000 (2025-26) |
| Gifts to spouse | Unlimited (no gain/no loss) |
| Gifts to charity | No CGT (full relief) |
| Small gifts (under £250) | No CGT (de minimis) |
Inheritance Tax Considerations
| Gift Timing | IHT Treatment |
|---|---|
| Gift and survive 7 years | Out of your estate |
| Gift and survive 3-7 years | Tapered relief |
| Gift and die within 3 years | Full IHT |
| Gift to spouse | Always IHT exempt |
Gifts of crypto are potentially exempt transfers (PETs) for IHT.
What Counts as a Gift
| Transaction | Tax Treatment |
|---|---|
| Send crypto to a friend as a gift | Disposal |
| Pay someone in crypto for services | Payment (income for recipient) |
| Lend crypto to someone | Not a disposal (if returned) |
| Transfer to your own wallet | Not a gift |
| Give crypto as a birthday present | Disposal |
Record Keeping for Gifts
| Record | Why |
|---|---|
| Gift date | CGT timing |
| Market value at gift | Disposal value |
| Recipient’s name & relationship | Evidence |
| Transaction hash | Proof of transfer |
| Your cost basis | Gain calculation |
Bottom Line
Gifting crypto is a disposal for CGT. Gifts to a spouse are tax-free. Gifts to anyone else trigger CGT on the gain from your cost basis to the market value at gift. The CGT allowance (£3,000) may cover small gifts. For IHT, gifts are potentially exempt if you survive 7 years. Keep records of all gifts. Consider using the spouse exemption for tax-efficient transfers between partners.
Planning gifts around the rules
Because gifting crypto is a disposal for Capital Gains Tax, a little advance planning can make a real difference to the tax you owe. The annual exempt amount of £3,000 (2025-26) means that if your total gains across the year stay within that figure, a gift to a friend or relative can be made tax-free, so timing your gifts to make the most of your allowance each year is a sensible, low-effort strategy. Staggering a larger gift across two tax years rather than making it all at once can also keep more of the gain inside your exempt amount.
The spousal route is the most efficient way to move crypto between partners. Because a transfer to a spouse or civil partner is on a no-gain/no-loss basis, it does not trigger CGT and the recipient inherits your original cost basis. This can be useful for estate and tax planning — for example, moving assets toward a partner in a lower tax bracket before they are sold, so the realised gain is taxed at a lower rate. There is no limit on how often you can do this.
One point to weigh carefully is the difference between a genuine gift and a payment. Sending crypto to someone as a gift is a disposal, but paying someone in crypto for services is treated as income for the recipient, which changes the tax picture entirely. Similarly, lending crypto is not a disposal if it is returned, and moving coins to your own wallet is simply a transfer, not a gift. Understanding which category your transaction falls into is the foundation of getting the tax right.
Common questions
Do I need to report a small gift of crypto? It depends on your total gains. If your overall gains for the tax year stay within the £3,000 annual exempt amount, there may be no CGT to pay, but you should still keep appropriate records and reflect disposals in your tax position, especially if you use the gift as part of larger gifting for inheritance tax purposes.
Is there any way to gift crypto entirely tax-free? Yes, in specific cases. Gifts to a spouse or civil partner are no-gain/no-loss transfers, and gifts to UK-registered charities attract full relief. Otherwise, the main tool is the £3,000 annual exempt amount, which covers small gifts each year.
What happens to the recipient’s tax if they sell the gifted crypto? They are taxed on the growth since they received it, because they take on the market value at the time of the gift as their cost basis. So the donor is taxed on the gain up to the gift, and the recipient is taxed on any gain after they receive it.
Could gifting crypto trigger inheritance tax? It can, if you die within seven years of making the gift. Gifts made within three years of death are subject to full inheritance tax on the value, while gifts made between three and seven years before death benefit from tapered relief. Gifts to a spouse are always exempt.
Record keeping that protects you
Whatever you give, records matter. For every gift, note the date, the market value at the time of the gift, the recipient’s name and relationship to you, and your own cost basis. Keep the transaction hash as proof of transfer. These notes let you calculate the gain or relief properly and support your position if HMRC has questions. Gifting is straightforward, but only with tidy records — reconstructing values months after the fact is far harder than writing them down at the time.