Bitcoin Probate in the UK
What Is Probate?
Probate is the legal process of administering a deceased person’s estate in England and Wales. It involves validating the will (if one exists), identifying and valuing the assets, paying debts and taxes, and distributing the remaining assets to beneficiaries.
The process is managed by the executor named in the will, or by an administrator appointed by the court if there is no will. The executor applies for a Grant of Probate, which gives them the legal authority to deal with the deceased’s assets.
For traditional assets — bank accounts, property, investments — the process is well-established and supported by institutional infrastructure. For cryptocurrency, the process is significantly more complicated.
The Executor’s Challenges
When a UK crypto holder dies, the executor faces challenges that do not exist with traditional assets.
Discovery
The first challenge is simply finding out that cryptocurrency exists. Unlike bank accounts and property, there is no central registry of cryptocurrency holdings. HMRC does not maintain a list of crypto owners. There is no equivalent of a land registry or share register.
If the deceased did not document their holdings, the executor may need to:
- Search the deceased’s devices for wallet software or exchange apps
- Check email accounts for exchange registration confirmations
- Look for hardware wallets (Ledger, Trezor, Coldcard) among physical possessions
- Search for written seed phrases, recovery cards, or metal backups
- Review bank and credit card statements for purchases from crypto exchanges
- Check browser history and bookmarks for exchange websites
Valuation
HMRC requires the estate to be valued at the date of death. For cryptocurrency, this means establishing:
- Which cryptocurrencies were held
- The quantity of each
- The market price of each at the date of death
For exchange-held crypto, transaction histories can be obtained from the exchange. For self-custody wallets, the executor needs to access the wallet (which requires the private keys) or at least identify the public addresses to check balances on the blockchain.
Valuation evidence should be documented carefully, using reputable price sources such as CoinGecko, CoinMarketCap, or the exchange’s own price data.
Access
Accessing the cryptocurrency is often the most difficult step.
Exchange-held crypto: The executor contacts the exchange’s bereavement team with the required documentation (death certificate, grant of probate, ID verification). The exchange processes the claim and releases the funds to the estate.
Self-custody crypto: The executor needs the private key or seed phrase. Without it, the crypto cannot be accessed at all. This is where the quality of the deceased’s inheritance planning makes the difference between a recoverable estate and a total loss.
The Probate Process for Crypto
Step 1: Apply for Grant of Probate
The executor applies to the Probate Registry for a Grant of Probate. This requires submitting the original will, a death certificate, and the probate application form. For estates above the inheritance tax threshold, an IHT400 form must also be submitted to HMRC.
Cryptocurrency holdings must be included in the IHT400 if the total estate exceeds the nil-rate band. Even if the executor cannot yet access the crypto, its estimated value should be declared.
Timeline: The grant typically takes 4-8 weeks from application, but delays are common.
Step 2: Gather Crypto Assets
Once the grant is issued, the executor has the legal authority to deal with the estate’s assets.
For exchange-held crypto: Contact each exchange where the deceased held an account. Major exchanges have bereavement or estate processes:
- Coinbase: Submit a request through their support system with death certificate, grant of probate, and executor ID. Funds are typically released to a nominated bank account.
- Kraken: Contact their support team with the required documentation. They may require additional verification.
- Binance: Submit a bereavement claim through their support portal. The process can be longer due to the company’s global structure.
- Smaller exchanges: Processes vary. Some may not have formal bereavement procedures, requiring more negotiation.
Timeline: Exchange processing typically takes 2-8 weeks after all documentation is submitted.
For self-custody crypto: The executor uses the private key or seed phrase to restore the wallet and transfer the funds to a wallet controlled by the estate. This requires:
- The seed phrase or private key
- A compatible wallet application
- Basic understanding of how to create a transaction
If the executor is not technically confident, they should engage a crypto-literate adviser or solicitor to assist with this step.
Step 3: Pay Inheritance Tax
IHT is due within six months of the end of the month of death. If the estate includes significant cryptocurrency, the executor may need to sell some crypto to cover the tax bill.
This requires careful timing. The executor needs to:
- Calculate the IHT liability based on the date-of-death valuation
- Access and sell sufficient cryptocurrency
- Transfer the proceeds to a bank account
- Pay HMRC
If the crypto cannot be accessed quickly enough (for example, if keys are missing or the exchange process is delayed), the executor may need to use other estate assets to pay the tax or apply to HMRC for additional time.
Step 4: Distribute to Beneficiaries
Once debts and taxes are paid, the remaining crypto can be distributed to beneficiaries according to the will.
Distribution can be made either:
- In crypto — by transferring Bitcoin directly to the beneficiary’s wallet address
- In fiat — by selling the crypto and distributing the cash proceeds
The choice depends on the beneficiary’s preference and capability. If the beneficiary does not have a cryptocurrency wallet or understand how to manage one, converting to fiat may be more practical.
Common Problems
No Will
If the deceased did not leave a will, the estate is distributed according to the rules of intestacy. Crypto assets are treated the same as any other property under these rules. An administrator is appointed by the court to handle the estate.
Missing Keys
If the private keys or seed phrase cannot be found, self-custody Bitcoin is permanently lost. The executor should document all efforts to locate the keys and may need to write off the crypto as unrecoverable in the estate accounts.
HMRC’s position on the tax implications of provably lost crypto is not entirely clear. Professional advice should be sought.
Volatile Markets
Bitcoin’s price may change significantly between the date of death and the date of distribution. This can affect IHT calculations, beneficiary expectations, and the executor’s decisions about when to sell.
Executors should document their decision-making process, especially if they choose to hold crypto rather than sell immediately.
International Complications
If the deceased used exchanges registered in different countries, the executor may need to navigate multiple legal jurisdictions. Crypto held on non-UK exchanges may be subject to additional compliance requirements.
Timeline Summary
| Stage | Typical Duration |
|---|---|
| Gathering documentation | 1-2 weeks |
| Applying for Grant of Probate | 4-8 weeks |
| Exchange bereavement claims | 2-8 weeks per exchange |
| Self-custody wallet recovery | 1-2 weeks (if keys available) |
| IHT payment deadline | 6 months from end of month of death |
| Full estate distribution | 6-18 months total |
Advice for Executors
If you have been named as executor for an estate that includes cryptocurrency:
- Do not rush. Take time to understand what the deceased held and how it was stored.
- Get professional help. A crypto-literate solicitor or adviser can save you significant time and reduce the risk of errors.
- Document everything. Keep records of all valuations, communications with exchanges, and decisions made.
- Secure the keys. If you find seed phrases or private keys, store them securely immediately. Do not leave them on a desk or take photos on your phone.
- Understand the tax. Crypto is subject to IHT and any gains made during administration may be subject to CGT.
Disclaimer
This guide provides general information about the probate process for cryptocurrency in the UK. It is not legal or tax advice. Consult a qualified solicitor and tax adviser for guidance specific to your situation.
Related Reading
- Bitcoin Inheritance Tax (UK) — The IHT rules executors need to understand during probate.
- Finding a Crypto-Literate Solicitor — How to find professional help for crypto probate.
- Bitcoin Inheritance Planning (UK) — Prevention is better than cure — plan ahead to simplify probate.
- Crypto Will Writing Guide — A properly drafted will makes probate significantly easier.
- Gerald Cotten: QuadrigaCX — The most extreme example of what executors face when no plan exists.