Bitcoin by business type: ownership and tax

Last checked 1 November 2026. The legal form of a business decides who owns the bitcoin and who pays tax on it. This page sets out the official starting points. Your accountant decides how they apply, and some forms have rules this page does not cover. If anything here conflicts with the linked source, the source wins.

Most of this site is written for limited companies and corporations. Many small businesses are not. A sole trader, a partnership, an LLP, an LLC, an S corporation and a charity each hold bitcoin differently, and the differences matter more than any detail of custody. This page shows, form by form, who legally owns the bitcoin, who pays tax on gains, and what to watch.

United KingdomGo to United States

UK: the forms side by side

Form	Who owns the bitcoin	Who pays tax on a gain	Watch
Sole trader	You do. GOV.UK says a sole trader is personally responsible for the business's debts, so there is no separate legal person.	You, through Self Assessment. Bitcoin held as an investment is usually within Capital Gains Tax.	Business and personal bitcoin are easy to mix. Keep separate wallets and records. See the Making Tax Digital note.
Partnership	The partners. GOV.UK says each partner pays tax on their share of the profits, and a partner can be a company.	Each partner, on their share.	The partnership agreement should say whose bitcoin it is and how it is shared. Ask your adviser how gains are split.
Limited liability partnership (LLP)	The LLP, which is a separate legal person.	HMRC says an LLP carrying on a business is generally treated as transparent for tax, so the members are taxed.	Transparency can stop, for example in a liquidation. Check the position with your adviser before winding up.
Limited company	The company.	The company, through Corporation Tax on chargeable gains.	Directors' duties, the treasury policy and the accounting standard all apply. See the company guides.
Charity	The charity, held by its trustees.	Charities have tax exemptions with conditions. Ask your adviser.	Trustees have investment duties. See the charity section below.

Source: GOV.UK: Set up as a sole trader, GOV.UK: Set up a business partnership, HMRC: PM131450: limited liability partnerships, taxation, HMRC: CRYPTO41250: Corporation Tax on chargeable gains, what counts as a disposal.

UK: sole traders and partners

A sole trader who buys bitcoin with business money still owns it personally. When it is sold, the gain is the individual's, and the starting point is Capital Gains Tax for individuals, unless the activity is a trade in its own right. HMRC's guidance on what counts as a disposal for individuals covers sales, swaps, spending and gifts. Our Making Tax Digital note explains why bitcoin gains are usually outside the quarterly updates.

Source: HMRC: CRYPTO22100: cryptoassets for individuals, what is a disposal.

UK: charities

The Charity Commission's guide for trustees on investment, CC14, says trustees must use reasonable care and skill, taking advice when necessary, and must consider whether investments are suitable for the charity. It is direct about crypto: it calls crypto assets an example of a high risk investment and says it is unlikely to be suitable for most charities to invest in them. Trustees who still consider it must understand the risks and be certain they have the expertise to manage them. Start with CC14, take advice, and write the decision down.

On donations, HMRC's Gift Aid guidance says it does not consider cryptoassets to be currency or money, so donations of cryptoassets are not eligible for Gift Aid. A donor can sell the cryptoassets first and give the money, subject to the normal conditions, and HMRC reminds donors to consider their own Capital Gains Tax position. Check with your adviser before accepting or making a gift.

Source: Charity Commission: Charities and investment matters: a guide for trustees (CC14), GOV.UK: Charities: detailed guidance notes, chapter 3, Gift Aid.

United StatesGo to United Kingdom

US: the forms side by side

Form	Who owns the bitcoin	Who pays federal tax on a gain	Watch
Sole proprietor	You do.	You, on your own return.	Keep business and personal bitcoin apart. Track lots by wallet.
Single member LLC	The LLC, under state law.	The IRS says a single member LLC is disregarded by default, so the owner reports the income, unless it elects to be taxed as a corporation.	Legal ownership and tax treatment differ. Keep the LLC's wallets in its own name.
Multi member LLC	The LLC.	The IRS says it is taxed as a partnership by default, so members are taxed on their shares.	The operating agreement should cover the bitcoin, including who can sign.
S corporation	The corporation.	The IRS says S corporations pass income, losses, deductions and credits through to shareholders.	Gains flow to shareholders who may not receive cash to pay the tax.
C corporation	The corporation.	The corporation, at the 21% federal rate, with a second layer of tax on dividends.	Capital losses can only offset capital gains. QSBS may apply to the shares.
Charity (501(c)(3))	The charity.	Generally exempt, with conditions.	Donations of bitcoin over $5,000 need a qualified appraisal.

Source: IRS: Notice 2014-21: virtual currency is treated as property for federal tax purposes, IRS: Single member limited liability companies, IRS: Limited liability company (LLC): default classification, IRS: S corporations, IRS: Publication 542, Corporations: 21% rate and capital losses.

US: basis and records

The IRS treats bitcoin as property, and basis is normally what you paid, including certain costs. Whatever the form, keep a record of each lot, by wallet or account. Since 2025, the IRS has required cost basis to be tracked by wallet or account, and Revenue Procedure 2024-28 explains how to allocate unused basis.

Source: IRS: Publication 551, Basis of assets, IRS: Revenue Procedure 2024-28: allocating unused basis to wallets and accounts (PDF).

US: charities and donations

In Chief Counsel Advice 202302012, the IRS said a taxpayer claiming a deduction of more than $5,000 for donated cryptocurrency must get a qualified appraisal, and that a value from an exchange was not enough. For a charity deciding whether to hold bitcoin as an investment, state law on how charities invest also applies. Check with your adviser.

Source: IRS: Chief Counsel Advice 202302012: qualified appraisal for donated cryptoassets over $5,000 (PDF).

US: shares in a C corporation

Holders of shares in a C corporation may be able to exclude some or all of their gain under section 1202, if many conditions are met. A large bitcoin holding can affect those conditions. See the QSBS note.

Both countries

Our judgement, not a rule: if the business is not a company or corporation, the cleanest approach is usually to decide first whose bitcoin it is, and write that down. Mixing business and personal holdings makes the records, the tax and any later sale harder for everyone.

Sources

Primary sources only. Each link was checked on 1 November 2026. Rules change, so confirm the current version with your adviser.

Education, not advice.

This is general information and education only. It is not financial, investment, tax, accounting, legal or regulatory advice, and it is not a recommendation to buy, sell or hold bitcoin or any other asset. It does not take account of your circumstances or those of your company. You must obtain your own official professional advice to confirm this information is correct before acting on it.

Rules change. This information is correct to our understanding at the last-reviewed date, but it may be incomplete or out of date, and official sources take precedence. Bitcoin is volatile. A company that buys it could lose some or all of the money it puts in.

Using this site does not create an adviser or client relationship. IoT Financial is not authorised or regulated by the Financial Conduct Authority (FCA) and is not registered with the US Securities and Exchange Commission (SEC) as an investment adviser. Read the full disclaimer.