Is gifting crypto to your spouse taxable in the UK?

Gifting crypto to your spouse in the UK is usually not taxable at the time of the gift. HM Revenue and Customs treats it as a "no gain, no loss" transfer, so the giver pays no Capital Gains Tax and the tax question moves to the spouse's eventual sale. Gifts to anyone else work differently, as is gifting crypto taxable explains.

What is a no gain, no loss transfer to a spouse?

HMRC's Cryptoassets Manual lists giving tokens away as a disposal, with the exception of a gift to a spouse or civil partner. The rule behind it is section 58 of the Taxation of Chargeable Gains Act 1992. HMRC's Capital Gains Manual says a transfer between spouses or civil partners who are living together gives neither a gain nor a loss to the person transferring.

Any price paid is ignored, so a gift and a sale between spouses are treated alike. A few exceptions exist, such as trading stock.

What cost does the receiving spouse use?

The recipient is treated as acquiring the tokens for the giver's own costs. HMRC's HS281 helpsheet says that on a later disposal, the recipient counts the combined costs the transferor incurred. In effect the original cost basis moves across with the coins.

HMRC pools tokens of the same type with one averaged cost for each type, so the received tokens join the recipient's own pool for that coin. When the recipient later sells, swaps or spends them, the normal rules in how crypto is taxed in the UK apply. Each person has their own tax-free allowance, which GOV.UK lists as £3,000 for individuals.

Does the spouse rule still apply after separation?

For a limited time. HS281 says couples count as living together unless separated by court order, by a formal deed, or in a way likely to be permanent.

For transfers on or after 6 April 2023, no gain, no loss treatment continues after separation until the earlier of two dates. One is the end of the third tax year after the year the couple stopped living together. The other is the date a divorce, annulment or dissolution is granted. Transfers under a formal divorce agreement or court order have no time limit. Outside these rules a transfer is treated at market value, so the giver may have a taxable gain. Wider issues are covered in how crypto is handled in a divorce.

Is there Inheritance Tax on a crypto gift to a spouse?

GOV.UK says there is no Inheritance Tax on gifts to a husband, wife or civil partner, with no limit, as long as they live in the UK permanently and you are legally married or in a civil partnership. GOV.UK's page does not cover a spouse living abroad.

Gifts to other people are different. They are generally free of Inheritance Tax if you live 7 years after giving them, and each person can give £3,000 a year without it counting toward the estate.

Rules differ by country and change often. Check HMRC or a qualified professional for your own situation.