Give it now or leave it: gifting crypto versus inheriting it

Plenty of people would rather see their children use the money than wait for a funeral. For crypto there’s a second argument: a gift made now is a gift you can explain in person, with a wallet set up together, rather than a seed phrase left in a drawer. This page covers the tax side for the countries this site deals with, then the practical side.

Not tax advice. Figures are for 2026; the rules change, and your own adviser knows your situation.

United States

• Gift tax. You can give $19,000 per recipient per year without reporting it (IRS). Above that, you file Form 709 and the excess counts against the same $15 million lifetime exemption that covers your estate, so almost nobody actually pays gift tax. Gifts to a US-citizen spouse are unlimited; to a non-citizen spouse, $194,000 a year.
• The basis trap. The recipient of a gift takes your purchase price as their cost basis (26 U.S.C. §1015). An heir takes the value at your death (§1014). Example: bitcoin bought for $5,000, now worth $80,000. Give it today and your daughter’s gain when she sells is measured from $5,000. Leave it to her and it’s measured from $80,000. For crypto with a large built-in gain, holding until death can save the family a lot of tax; for coins bought recently, it makes little difference.
• The recipient owes nothing on receipt. Receiving crypto as a gift isn’t income; tax arrives when it’s sold (IRS FAQ, Q31–Q33). If the giver can’t document the original cost, the recipient’s basis is zero, so hand over the records with the coins.

United Kingdom

• Capital gains tax on the gift itself. HMRC lists “giving away tokens to another person” as a disposal: you’re treated as if you’d sold them at market value, “even if they did not actually receive anything” (HMRC Cryptoassets Manual, CRYPTO22100). The gain above the £3,000 annual exempt amount is taxed at 18% or 24% (GOV.UK). Gifts to a spouse or civil partner are exempt; they take over your original cost (GOV.UK).
• Inheritance tax: the seven-year rule. A gift to a person is potentially exempt: no inheritance tax if you live seven more years. Die within three years and it’s taxed at the full 40%; between three and seven years the rate tapers (GOV.UK). Small amounts are exempt outright: £3,000 a year in total, £250 per person for small gifts, and regular gifts out of surplus income.
• Compare with death. On death there’s no capital gains tax at all and heirs take the value at that date. So in the UK a lifetime gift of crypto with a big gain can cost capital gains tax that an inheritance would never have triggered, while possibly saving inheritance tax. The two have to be weighed together.

Canada

A gift of capital property is a deemed disposition at fair market value: you’re taxed as if you’d sold it (CRA, IT-209R, an archived bulletin; the rule is unchanged), and the CRA’s crypto guide lists transferring crypto “by way of gift” among the dispositions it taxes (CRA). There’s no gift tax as such. Death works the same way, a deemed disposition, so the difference is mainly timing and the spousal rollover. See Crypto inheritance in Canada.

Australia

Same principle: “When you gift or donate crypto assets, you are disposing of them”, and the market value at that moment is your sale price (ATO). The recipient owes nothing until they sell, and the value at that moment becomes their cost base. Compare with death, where no tax is triggered and the heir inherits your original cost base instead. See Crypto inheritance in Australia.

European Union

Most EU countries have a gift tax that’s integrated with inheritance tax, usually with allowances that reset after a number of years:

• Germany: gifts and inheritances from the same person within ten years are added together; the allowance is €500,000 for a spouse and €400,000 per child (ErbStG §14, §16).
• France: the allowance per giver and receiver renews every fifteen years; €100,000 per child (service-public.fr).
• Netherlands: yearly tax-free gift of €6,908 from parents to a child and €2,769 from anyone else, plus a one-off larger exemption for children between 18 and 40 (Belastingdienst).

Country pages: Germany, France, Netherlands. Whether the gift itself triggers capital gains tax varies: some countries tax crypto gains like the UK, others tax holdings differently. Ask locally.

How to actually give crypto

1. They need a wallet of their own. Not a copy of your seed phrase: shared keys aren’t a gift, they’re joint custody, and a mess for tax. Help them set up an exchange account or, for larger amounts, a hardware wallet with their own seed and their own plan.
2. Send a small test amount first, confirm they can see it, then the rest.
3. Record the date, the amount and the value on both sides, plus your original purchase date and cost. In the US the recipient’s basis depends on your records; in the UK, Canada and Australia the value at the moment of the gift is your sale price.
4. File what’s needed: Form 709 in the US above the annual exclusion, your capital gains return in the UK, Canada or Australia, the gift tax return where the EU country requires one.
5. Update your inventory and letter, so your executor doesn’t go looking for coins that are now your daughter’s.

Next: Incapacity.