Knowledge Portal: Managing Business Finances and more

CHRIS BARNARD April 27, 2023

Despite a degree of recent global economic turbulence having a somewhat noticeable impact on cryptocurrency markets, investment in cryptocurrencies, blockchain technology and other related digital assets continue to remain popular amongst UK investors. In fact, data shows that between 2018 and 2021, crypto transactions and adoption in the UK increased by as much as 650%, from 1.5 million to 9.8 million active investors.

Just as with traditional investments, most cryptocurrency holders will be looking to protect the wealth earned from accumulated assets to be passed onto future generations or otherwise managed by a chosen estate. Though at present, cryptocurrencies are not taxed in the way traditional assets are and have specific tax considerations and tax reporting requirements.

Whether you’re wondering how to start investing in cryptocurrency or are already in possession of a healthy portfolio, financial advisers recommend that asset holders consider actions like inheritance tax planning trusts sooner rather than later to help protect accumulated wealth from avoidable taxation.

This guide will explain how HMRC views cryptocurrencies in terms of taxable assets, how investors can navigate UK practices to minimise tax liabilities relating to crypto assets, as well as outline the most effective types of trusts and estate planning procedures UK crypto holders should consider for tax purposes.

What is tax planning?

Before outlining the ways in which crypto investors can protect their assets using trusts and other related protections, it’s wise to understand what is meant by the term tax planning. In short, personal tax planning involves analysing a person’s financial assets (in this case cryptocurrencies) to deduce how HMRC is permitted to tax gains and use this to create a plan allowing the holder to pay the lowest possible amount.

When investing in cryptocurrency, tax planning should form an essential aspect of all long-term financial plans, as a reduction in tax liability facilitated through these actions will ultimately contribute to a greater amount of earnings able to be paid into accounts like retirement and inheritance funds.

At present, HMRC does not view crypto assets as comparable to currency or money, meaning that all profits and financial gains gleaned from buying or selling crypto will be considered as taxable. In addition, cryptocurrencies are classed as property by HMRC in terms of inheritance tax, meaning they will form part of any taxable estate and contribute to the £325,000 threshold used to calculate inheritance tax.

Identifying crypto assets

To ensure that all taxable crypto assets are appropriately accounted for and factored into tax implications, investors must clearly outline where their assets are held as well as their financial value. Any assets stored exclusively online in protected wallets can be difficult for financial advisors to locate, though if they are uncovered after death, any retroactive tax applied can affect previous tax planning efforts.

Additionally, UK tax law states that any resident who pays tax in the UK will also be required to pay tax on the disposal of crypto assets, regardless of whether said assets were purchased through an offshore exchange or bank account. In layman's terms, any capital gains taxes applicable to the disposal of crypto assets cannot be legally avoided so long as the holder is considered a tax resident in the UK.

Types of cryptocurrency investment trust

Choosing to transfer accumulated crypto assets into a trust can be incredibly effective in terms of inheritance tax planning, primarily as doing so will offer a range of exemptions on certain types of assets as well as act to protect any income or capital gains tax generated over time from inheritance tax.

When establishing a trust, asset holders are able to outline how funds are to be disbursed after their passing as well as decide which beneficiaries are to receive said funds. A well-executed trust will also add a degree of asset protection, for example, any crypto assets stored within a trust will be exempt from taxation or creditors should the holder experience any serious financial hardship during their lifetime.

When selecting the most appropriate type of trust in which to store crypto assets, holders should discuss their plans with a financial advisor or estate planner to ensure that the option chosen can facilitate what they wish to achieve. In most situations, investors will be presented with four main options, including:

Bare trusts

Assets stored in a bare trust are held in the name of the trustee, though the beneficiary will retain the right to all capital and income generated by held assets which they will be permitted to access at any time provided they are aged 18 or over (16 in Scotland). This type of trust is generally used to pass assets on to young people as a form of inheritance, with the trustee controlling the assets until the beneficiary becomes a legal adult

Interest in possession trusts

Assets stored in this type of trust are controlled by the trustee, though all income generated will be passed on to the beneficiary as it arises. All income paid through the trust will be taxable once received like income tax, though the assets themselves will remain protected and inaccessible to beneficiaries so long as the trust is still active

Discretionary trusts

When operating a discretionary trust, the trustee is able to decide how all generated income is used and, in some cases, the capital itself. This will typically include what gets paid out, who is to be paid, how frequent payments should be, as well as any extra conditions imposed on beneficiaries to provide some financial help to inheritors

Mixed trusts

This describes a combination of two or more trusts in which the different parts of each trust will be taxed according to specific rules, typically these trusts will be used to cater for a particular set of circumstances, such as inheritance for children of different ages

How to transfer cryptocurrency to a trust

Transferring cryptocurrency into a trust is a relatively simple process, though a financial advisor or estate planner will be required to set up the trust on behalf of the asset holder. A legal arrangement will be drawn up in which the asset holder will be able to set specific rules outlining how stored assets are to be used and distributed to a chosen number of beneficiaries.

As with any legally binding document, the wording used to describe a cryptocurrency investment trust must be carefully considered. At least two trustees will be required to oversee the management of the trust, with at least one of these individuals being knowledgeable in the handling of cryptocurrencies, including how to access wallets, navigate exchanges and understand the workings of crypto markets.

With these factors outlined carefully in a legally binding document, all crypto assets can be transferred to the trust by a preappointed financial advisor with the described rules being immediately applied.

Is it worth investing in cryptocurrency UK?

Though some investors may view crypto asset investments as a potentially volatile asset, the UK government’s plans to regulate the crypto market, classify stablecoins as a recognised form of payment and drive the UK towards becoming a global crypto asset technology hub should act as clear indicators that investing in crypto will remain worthwhile for investors that possess a good understanding of the crypto market.

Provided that asset holders take the time to consult with financial advisors and estate planners to gain a clear picture of UK practises and guidelines for crypto tax treatment, the formation of a well-executed trust can have tax benefits as well as protect any income earned from crypto assets in order to strengthen both retirement and inheritance funds for asset holders as well as their chosen beneficiaries.

There’s a reason why trusts often factor in to how the wealthy are planning tax reductions and ensuring that their assets are protected from avoidable charges, though unlike some resources, the formation and execution of a trust is easily accessible to investors from all backgrounds to consider as part of an effective tax planning process.

FAQs on Crypto Trusts and Tax Planning

What is a trust in the context of crypto investing?

A trust is a legal arrangement where assets, such as cryptocurrency, are held by trustees on behalf of beneficiaries. It can help manage wealth, protect assets, and support long-term estate planning.

Why might a crypto investor consider using a trust?

Trusts can be effective for asset protection, inheritance planning, and tax efficiency. By placing crypto into a trust, investors may reduce exposure to Inheritance Tax and ensure assets are transferred securely to future generations.

Are there tax implications when transferring crypto into a trust?

Yes, transferring crypto into a trust is treated as a disposal for Capital Gains Tax purposes, based on the asset’s market value at the time of transfer. It’s important to plan this carefully to avoid unnecessary tax charges.

Can trusts help reduce Inheritance Tax on crypto assets?

Potentially, if structured correctly and held for the required period, certain trusts can remove crypto assets from your estate for Inheritance Tax purposes. Professional advice is essential to ensure compliance with HMRC rules.

Do trustees have reporting responsibilities for crypto assets?

Yes, trustees must maintain detailed records, report valuations, and ensure compliance with both HMRC trust reporting requirements and anti-money laundering regulations for digital assets.

Can Collective Concepts Accounting advise on using trusts for crypto?

Yes, we can help you assess whether a trust is suitable for your crypto holdings, calculate potential tax implications, and ensure everything is structured in line with HMRC and UK trust law requirements.

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Business rates: The most outdated tax in the UK?

By Chris Barnard • January 21, 2026

Few things frustrate British business owners more than business rates. If you ask someone running a shop, café, studio, or office, what they think about business rates, you’ll get the same answer. And it isn’t one we can publish! Almost all owners see business rates as outdated, unfair, and out of touch with how businesses work today. It raises an awkward question. In a country supposedly trying to encourage entrepreneurship, regeneration and innovation, why are we still relying on a tax that seems to actively discourage all three? A tax stuck in the past Business rates have existed in some form for centuries. They started as property taxes in 17th-century England, when most wealth was in land and buildings. Back then, it made sense: if you had valuable property, you were seen as successful and able to help fund local services. Value is now created through digital services, intellectual property, brands and platforms, and not just physical premises. Yet business rates still operate on the same basic principle. Where you are matters more than how you’re actually performing. There have been some attempts at reform but there has been no interest in conceding that the tax is no longer fit for purpose. Rateable values are still based on estimated rents. Revaluations do not happen often, and reliefs are added on top instead of being part of the system. In short, business rates have been adjusted, not redesigned. How much are UK businesses really paying? Many people are surprised by how much businesses pay in rates, especially compared to other business taxes. UK businesses pay more than £25 billion in business rates each year. This is one of the biggest business taxes, second only to employer National Insurance contributions. According to the Office for Budget Responsibility , business rates consistently raise more revenue than corporation tax from SMEs. The way business rates are calculated in England also stands out. For 2024 to 2025, the standard multiplier is just over 51p per pound, so businesses pay about 51p each year for every £1 of rateable value. This is especially controversial because businesses must pay rates even if they are not making a profit. A company can be losing money and still have a large rates bill. In contrast, corporation tax only applies to profits. The British Retail Consortium often points out that business rates hit physical retailers the hardest. Retailers make up about 5 per cent of the UK economy but pay over 20 per cent of all business rates. For many high street businesses, rates are their biggest fixed cost after wages and often cost more than rent. The physical presence penalty Business rates mainly penalise businesses for being visible and having a physical presence. The more established you are in your community, the more you usually pay. Top high street spots, warehouses near transport links, and city-centre offices all have higher rateable values. At the same time, digital businesses can earn a lot in the UK while working from cheaper locations or even abroad. There are some digital services taxes now, but they bring in much less than business rates and only affect a small number of companies. This means the system encourages businesses to keep their physical presence small and discourages investment in high streets, town centres and community spaces. It’s no wonder that our high streets have become like ghost towns. What do other countries do differently? The UK depends more on property-based business taxes than most other countries. In Germany, local authorities levy a trade tax based largely on profits , not property values. France has made big changes to its business taxes by reducing those based on property and focusing more on economic activity and value creation. Many countries check property values more often that the UK, which helps avoid sudden jumps in costs, and they limit yearly increases more strictly. The priority elsewhere is to focus more on what businesses earn, not just where they are. Is reform even possible? Business rates give local authorities a steady and reliable source of income, which makes them hesitant to change the system. However, just because the system is stable does not mean it is fair for those who pay. The current setup puts too much pressure on some sectors that are already struggling, while letting others grow quickly with lower costs. The main obstacle to reform is political. Any real change would shift who pays more or less tax. Some businesses would pay more, others less. It means big decisions which most politicians shy away from. Ignoring this issue has real effects, which we can see on our high streets. Time for a grown-up debate Business rates no longer match how business works in the UK. They discourage investment in physical locations, make competition unfair, and put too much pressure on traditional businesses. Whether the solution is a tax based on turnover or a mix of models, keeping things as they are is getting harder to justify. This is not a question of lowering taxes. The challenge is to find a system that fits a modern economy. Don’t pay too much Business rates might feel immovable, but there are reliefs, exemptions and reductions available. Many businesses either miss them entirely or do not realise they qualify. Small Business Rate Relief, retail and hospitality relief, transitional relief and discretionary local authority support can all make a real difference if they are properly understood and applied. The problem is that the system is complex, inconsistent and rarely explained in plain English. We can look at how much you are paying in business rates and ensure that you are not missing out on possible reductions.