UK Law and Practice Contributed by: Roger Gherson, Alfred Gherson, Lisa Uttley and David Tipping, Gherson Solicitors
2.7 Transfer of Assets: Digital Assets The Property (Digital Assets etc) Act 2025 (Royal Assent 2 December 2025) confirms that digital assets (including cryptocurrency, NFTs and tokenised assets) can be objects of personal property rights under Eng - lish law. For tax purposes, HMRC treats cryptoassets as prop - erty subject to IHT (valued at market value at death) and eligible for the CGT death uplift with no CGT charge on death. From January 2026, crypto service providers must report user information to HMRC. The most significant practical challenges relate to access and control. Self-custodied cryptoassets are permanently lost if private keys or seed phrases are not accessible to executors. Email and social media platforms typically restrict posthumous access, even with a grant of probate. Valuation of volatile or illiquid digital assets can be difficult. Best practice includes maintaining a secure digital asset inventory, recording private keys for executor access, nominating platform legacy con - tacts, appointing digitally competent executors and expressly addressing digital assets in the will. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities Trusts are liable to both income tax and CGT and their tax treatment can be complex, depending on the ben - eficiaries’ rights to the income and capital arising in the trust. For IHT purposes, most trusts are taxed in the same way. Almost all trusts are subject to the ‘relevant prop - erty regime’ outlined in 1.1 Tax Regimes . The tenth anniversary charges (and the costs of administering them) mean that, over time, maintaining a trust can be expensive.
1992, transfers between spouses or civil partners liv - ing together are made on a no gain/no loss basis, with the transferor’s original base cost carrying over to the recipient, subject to their period of residence in the UK as described above. Other Reliefs Hold-over relief on IHT-chargeable transfers allows the CGT charge to be deferred by reducing the donee’s base cost by the amount of the held-over gain. Transfers into and out of trusts are generally at mar - ket value, but holdover relief is typically available for discretionary trust transfers. The death of a life tenant triggers a market value deemed disposal with no CGT charge, mirroring the personal death uplift. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms Historically, trusts were a popular vehicle for manag - ing succession for non-domiciled individuals because the overseas assets held within the trust would remain excluded property even if the individual became deemed domiciled in the UK. Since the limitation of excluded property trusts to those whose settlors are currently not long-term UK residents or were not long- term UK residents when they died, the use of trusts has declined significantly. Another popular structure is a family investment com - pany (“FIC”). A FIC does not have a special legal sta - tus but is a common term for a company used to make long-term investments, with ownership divided across multiple generations of a family. The benefits of an FIC are that shares can be gifted to the next generation as PETs and therefore will not attract IHT so long as the donor survives 7 years and a company is generally simpler to manage than a trust. HMRC introduced a specialist FIC unit in 2019, but this was disbanded in 2021. HMRC found no correlation between FIC users and non-compliant behaviour. This cannot be seen as an “endorsement” for FICs by HMRC, albeit it was a recognition that FICs operate within the normal tax environment.
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