The UK government is grappling with the issue of taxing inherited cryptocurrency, as bereaved families face potentially huge tax bills on crypto assets they can’t even access. According to reports, around $30.2 million is lost every day worldwide as crypto traders pass away without leaving access to their digital assets. The current tax-free threshold in the UK is £325,000 ($409,000), with amounts above this value subject to a 40% tax. This means that even if an estate includes cryptocurrency that is inaccessible, families could still face significant tax liabilities.
Challenges of retrieving crypto assets in inheritance
The nature of cryptocurrency poses challenges when it comes to passing it on as part of an inheritance. Retrieving assets from crypto platforms is not a straightforward process, often lacking procedures, protocols, and laws. Experts argue that the UK government’s tax authority, HM Revenue & Customs, is ill-equipped to handle the complexities of cryptocurrency taxation. As a result, families are left in a difficult position, unable to sell or access the inherited assets and yet still burdened with tax obligations.
“Bereaved families face significant tax liabilities on inaccessible inherited crypto assets. ”
Policymakers needing to adapt to the digital asset landscape
This issue highlights the need for policymakers to address and adapt to the evolving landscape of digital assets. Findings like these underscore the importance of establishing clear and comprehensive regulatory frameworks to ensure fair and efficient taxation of cryptocurrencies.
Read more here at https://protos.com/uk-families-face-huge-tax-bills-for-locked-crypto-left-by-dead-traders/
