Do I pay tax if I gift cryptocurrency to a family member in the UK?

Full answer

A common misconception is that gifting an asset avoids tax because no money changes hands -- HMRC treats a gift of cryptocurrency the same as a sale at market value for Capital Gains Tax purposes, regardless of whether you received anything in return. **How the gain is calculated** When you gift crypto to anyone other than your spouse or civil partner, you are treated as having disposed of it at its market value on the date of the gift -- the gain is the difference between that market value and what you originally paid (plus any allowable costs), and this gain is chargeable to CGT in exactly the same way as if you had sold it for cash. **The 2026/27 CGT position** The Capital Gains Tax annual exemption is £3,000 for 2026/27. Gains above this are taxed at 18% for basic rate taxpayers and 24% for higher/additional rate taxpayers (on the portion of gains that fall in each band), the same rates that apply to residential property and most other chargeable assets. **The spousal exemption** Gifts between spouses or civil partners who live together are exempt from CGT entirely -- the receiving spouse simply inherits the original owner's base cost, meaning no gain or loss is triggered on the transfer itself, and any future gain is calculated from the original acquisition cost when they eventually sell. **What the recipient needs to know** For gifts to anyone other than a spouse, the recipient's base cost for their own future CGT calculation is the market value at the date of the gift (i.e., the same value the giver used to calculate their gain) -- so record-keeping matters for both parties, and the recipient should keep evidence of the crypto's value on the gift date. **Inheritance Tax consideration** Beyond CGT, gifting substantial crypto assets can also be relevant for Inheritance Tax if the giver dies within seven years of the gift, since it would generally be treated as a potentially exempt transfer, following the same seven-year taper rules as gifts of cash or other assets. **Worked example** Someone bought £5,000 of Bitcoin that is now worth £18,000, and they gift it to their adult child. This is a disposal at £18,000 market value, giving a gain of £13,000. After the £3,000 annual exemption, £10,000 is taxable -- at 18% or 24% depending on the giver's other income, producing a CGT bill of £1,800 to £2,400, even though they received no cash from the gift. **Practical tip** Keep detailed records of acquisition cost and dates for all cryptocurrency holdings, and get a reasonable market valuation at the date of any gift -- crypto values can be volatile, so use a reputable price source and keep a screenshot or record as evidence for HMRC if ever queried.

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