HMRC has confirmed that automatic new cryptocurrency rules will take effect from May 31, 2027, under the 'Crypto-Asset Reporting Framework'. The tax authority will work with international agencies to obtain details of UK taxpayers who hold overseas crypto-asset businesses.
International data sharing from 52 jurisdictions
From the effective date, HMRC will automatically start receiving comprehensive data on UK residents from cryptocurrency service providers located in 52 jurisdictions, including the Channel Islands, the Cayman Islands, and Ireland. From 2028, the scope will expand to include a further 15 jurisdictions, such as Singapore, Switzerland, and Gibraltar.
This international framework is designed to increase transparency over crypto holdings held by UK residents abroad, addressing a growing area of tax oversight.
Impact on probate and inheritance
TWM Solicitors, a leading private wealth and family law firm, says the new rules could help solve a growing problem of heirs failing to inherit cryptocurrencies owned by relatives. Duncan Mitchell-Innes, Deputy Head of Private Client and Partner at TWM Solicitors, notes that HMRC will be handed details on overseas crypto holdings owned by UK customers.
HMRC has confirmed it will respond to requests about crypto assets from solicitors who are undertaking probate. This could assist executors in identifying and administering estates that include cryptocurrency.
Challenges for executors
Mr Mitchell-Innes said in guidance: “We’re seeing more estates where cryptocurrency forms part of the assets that executors are trying to identify and administer. As ownership becomes more widespread, this is an issue we’re encountering more regularly.”
He added: “If HMRC does provide the information it receives from overseas crypto-asset businesses to executors, it could help address a growing problem for families trying to administer estates that include cryptocurrency. At the moment, very few overseas crypto-asset service providers will provide information to an executor – they often won’t even confirm if an individual held assets with them.”
Mr Mitchell-Innes continued: “With most traditional financial assets like savings or shares, the procedures for undertaking a probate have been long established. However, overseas crypto businesses generally do not cooperate with the process like a UK bank will.”
The new framework, introduced by the Labour Party government's tax authority, is expected to improve the flow of information for probate cases, potentially reducing the number of unclaimed crypto assets after an individual's death.
