What happens to your crypto when you die? Inheritance, taxes and access in the US, UK and Canada

Crypto raises an uncomfortable question that most holders never plan for: what happens to it when you die? The tax side is mostly familiar: crypto is treated like other property. The real danger is practical. If nobody knows it exists, or nobody can access the wallet, it can be lost forever.

This guide covers both: the tax rules in the US, the UK and Canada, and the steps that make sure your crypto can actually be passed on. It’s general information. For an estate of any size, get professional advice.

The two problems: finding it and accessing it

Bank accounts leave a paper trail and the bank can freeze and release them. Crypto is different:

• Exchange accounts are held by a company, so executors can usually work with the exchange to access them, once they know the account exists.
• Self-custody wallets are controlled only by whoever holds the seed phrase or private keys. There’s no company to call. If the phrase is lost, the funds generally are too.

HMRC’s guidance for executors acknowledges the first problem directly. Its checklist for identifying crypto in an estate is useful anywhere:

• Check for accounts with crypto exchanges or trading platforms.
• Review bank and credit card statements for payments to exchanges or crypto services.
• Search the person’s emails for references to crypto, bitcoin, ethereum, wallets or exchange accounts.
• Check mobile apps and online accounts used to buy, sell or store crypto.
• Look at their computer, tablet or phone for wallet apps.
• Review personal papers, notebooks and secure storage for wallet information or recovery phrases.
• Ask family members and advisers whether they know of any holdings.

United States

Estate tax

The IRS describes the estate tax as a tax on your right to transfer property at death, based on an accounting of everything you own or have certain interests in at the date of death, at fair market value. Crypto held at death is part of that gross estate.

For deaths in 2026, the basic exclusion amount is $15,000,000 (Revenue Procedure 2025-32), and the IRS lists the same figure as the 2026 filing threshold for the estate tax return. Most estates fall well below it. Married couples may also be able to pass the unused exemption of the first spouse to die to the survivor, through an election on a timely filed estate tax return.

What heirs pay

Inheriting crypto isn’t income. The tax comes when you sell or swap it, and two rules work in heirs’ favor:

• Basis: according to IRS Publication 551, the basis of inherited property is generally its fair market value at the date of death (or at the alternate valuation date, if the estate chooses it).
• Holding period: IRS Publication 544 says that if you inherit property, you’re considered to have held it longer than one year, regardless of how long you actually held it. Gains are therefore long-term.

Example. Your parent bought bitcoin for $5,000. It was worth $60,000 when they died. You sell it later for $65,000. Your basis is generally $60,000, so your taxable gain is $5,000, long-term.

When you report the sale on Form 8949, the IRS instructions say to enter “INHERITED” as the date acquired. See US crypto tax.

United Kingdom

Inheritance Tax

HMRC’s Cryptoassets Manual says crypto is treated as part of a person’s estate in much the same way as other assets, like bank accounts, property and shares, and its date-of-death value should be given on the Inheritance Tax return.

The general Inheritance Tax rules then apply, according to GOV.UK:

• There’s normally no Inheritance Tax if the estate is below the £325,000 threshold, or if everything above it goes to a spouse, civil partner, a charity or a community amateur sports club.
• The standard rate is 40%, charged only on the part of the estate above the threshold.
• The threshold can rise to £500,000 if a home is left to children or grandchildren, and a spouse’s or civil partner’s unused threshold can be added.

Two crypto-specific points from HMRC:

• If crypto is known to exist but is inaccessible, the personal representatives should explain why, and what they believe it’s worth, in the additional information box of the IHT400.
• Unlike property and shares, crypto doesn’t qualify for “loss on sale” relief, a relief available for some assets that are sold for less than their value at death.

What heirs pay

GOV.UK says you don’t usually owe tax at the time you inherit. Any Inheritance Tax is normally paid by the estate before you receive anything. But you may have to pay Capital Gains Tax when you sell something you inherited, and for investments like shares, GOV.UK explains that the tax is on any rise in value since the person died. See UK crypto tax.

Canada

The deemed disposition

Canada taxes gains at death through the deceased person’s own tax return. The CRA says a person who died is considered to have disposed of all the property they owned right before death, at fair market value. This is called a deemed disposition.

For crypto, that means any increase in value since it was bought is a capital gain, reported on line 12700 and Schedule 3 of the deceased’s final return. Half of a capital gain is taxable.

Transfers to a spouse or common-law partner

If the property goes to a surviving spouse or common-law partner who is resident in Canada, the CRA says it may pass without a capital gain or loss on the final return: the proceeds are treated as equal to the adjusted cost base, so the gain is zero. In effect, the tax is deferred until the spouse or partner disposes of it.

Losses and paying the bill

If the crypto fell in value, the CRA notes that net capital losses in the final return, and in the return for the year before death, can also be used to reduce other types of income, not only capital gains.

The executor can apply for a clearance certificate, which the CRA says lets the legal representative distribute assets without the risk of being personally responsible for unpaid amounts owed by the person who died. See Canada crypto tax.

At a glance

How to make your crypto inheritable

None of the tax rules matter if your heirs can’t find or open your wallets. A few steps make a big difference:

1. Keep an up-to-date list of where you hold crypto: exchanges, wallet apps, hardware wallets. No passwords or phrases in it.
2. Store your seed phrase safely, with at least one backup, and make sure a trusted person knows where it is. See seed phrase security.
3. Write a letter of instructions for your executor, kept with your will: what you hold, how it’s accessed and who can help. Don’t put the phrase itself in the will.
4. Keep records of what you paid, for your own taxes and to help your executors. See crypto taxes for your country.
5. Consider a professional. An estate lawyer can help set this up properly, especially for larger holdings.

For how custody choices affect this, see hot vs cold wallets.