The UK government has been told that it’s “simply not equipped” to properly tax crypto, following reports that bereaved families face potentially huge bills on inherited crypto that they can’t even access.
As reported by Telegraph Money, around $30.2 million is lost every day worldwide as crypto traders die without leaving their keys to their relatives.
However, despite the fact that these families will likely never even get their hands on these funds, let alone get to spend them, they could still be liable for some pretty hefty tax bills.
In the UK, the tax-free threshold currently stands at £325,000 ($409,000) with anything above this value taxed at 40%. For example, a £425,000 ($535,000) estate that includes £100,000 ($126,000) in cryptocurrency — whether it’s accessible or not — could still incur a £40,000 ($50,000) bill.
According to Assetpass founder Paul Rossini, “Unlike a traditional asset, passing crypto on in your will is virtually impossible,” (via Telegraph Money).
“It’s one thing buying the crypto … but it’s not very easy to go and retrieve those assets back from that platform.”
“There’s no procedure, there’s no protocol, there’s no law.”
Christopher Thorpe, a technical officer from the UK’s Chartered Institute of Tax, also took aim at the government’s approach, claiming that HM Revenue & Customs is “simply not equipped” for cryptocurrency.
“There’s absolutely nothing you can do about it because you can’t sell it,” he said.