Can I Leave Cryptocurrency In My Will?

Cryptocurrency is becoming more and more common in the investment market with at least 4.2 million people in the UK currently owning it in some form or another.

You may choose to leave your digital assets to your family members or someone you trust, or, maybe you find yourself inheriting digital assets from someone else? Nevertheless, it is important to consider how this is dealt with if you plan on including it in your Will.

What is Cryptocurrency?

Cryptocurrency is a digital asset which can be used as a form of currency. This means it can be bought, sold, exchanged – you can even save it and pass it on to someone in your Will. It is stored on a digital ledger on a blockchain which contains information relating to all transactions that take place all over the world.

The most common digital currencies include Bitcoin, Ethereum, Tether and Binance Coin.

These are stored on a ‘digital wallet’, and to access this, you require both a public and a private key. The public key allows other people to send cryptocurrency to you, and the private key allows you to securely move funds around or send them to other people.

What happens if you die without leaving details of your private key?

It is important to inform the people you are including in your Will of where they can locate your public and private key. Without these keys your cryptocurrency cannot be accessed by the Administrators of your estate, meaning they will be unable to deal with the asset and pass it on to your named beneficiaries.

Here at Johnson Astills, we advise our clients to keep a document detailing the public and private keys and store this alongside their Will. We would then store the details of how to access your private key alongside your Will, free of charge. This way, nobody can access your digital wallet during your lifetime, and storing these details alongside your Will means that your Administrators can ensure that your digital assets are dealt with in accordance with your Will.

Do I have to pay tax on my cryptocurrency?

Digital assets such as cryptocurrency, NFTs etc, all form part of a deceased person’s estate. This means that it would be subject to both inheritance tax and capital gains tax. Our specialist solicitors at Johnson Astills can provide you with advice on the tax implications of your digital assets, and should this be more complex, we correspond with tax specialists to ensure that all factors are taken into account.

If you would like to discuss creating (or updating) a Will, which may include leaving digital assets, our Wills specialist solicitors would be pleased to assist. Please get in touch with Johnson Astills today and we would be more than happy to discuss your requirements further. Please call us at our office in Leicester or our office in Loughborough. Alternatively, you may prefer to email us at legal@johnsonastill.com or fill in our enquiry form.