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.
This content is for educational purposes only. Not financial advice. Do your own research before investing.