The owner's estate and company bitcoin

Last checked 1 November 2026. Estate planning depends on personal circumstances and on the law where the owner lives and dies. Inheritance Tax and estate tax reliefs are complex. Treat this page as a list of questions for your solicitor, estate lawyer and tax adviser. If anything here conflicts with the linked source, the source wins.

When the owner of a small company dies, two separate things need to work. The company must still be able to control its bitcoin: that is a keys and governance problem, covered in keyholder continuity. And the owner's shares in the company must pass to the right people with the tax dealt with: that is an estate problem. This page is about the second, and how the two connect.

The important point is that the bitcoin belongs to the company, not to the owner. What sits in the owner's estate is shares. The bitcoin affects what those shares are worth and which reliefs may apply, but the company's own tax position on the bitcoin does not change because a shareholder has died.

Two layers: the company and the estate

In England and Wales, a will that has gone through probate can be found and ordered by the public. In many US states, probated wills are also public court records. That is why recovery words must never be written into a will.

Source: GOV.UK: Search probate records for documents and wills.

UK: keeping the company working

If a sole director and sole shareholder dies, the company can be left with nobody able to act. The model articles for private companies say that "where, as a result of death, the company has no shareholders and no directors, the personal representatives of the last shareholder to have died have the right, by notice in writing, to appoint a person to be a director". Your company may have its own articles, so check what they say. A second director, or a named successor in the shareholder agreement, avoids the gap.

Source: legislation.gov.uk: Companies (Model Articles) Regulations 2008, Schedule 1: model articles for private companies limited by shares.

UK: Inheritance Tax on the shares

HMRC says cryptoassets are treated as assets of a person's estate like any other, valued at the date of death. For an owner of a company, the asset in the estate is normally the shares, and their value reflects what the company owns, including its bitcoin. HMRC's guidance on the location of exchange tokens says it follows where the beneficial owner is resident, which matters for owners with links to more than one country.

Source: HMRC: CRYPTO25000: cryptoassets for individuals, Inheritance Tax, HMRC: CRYPTO22600: location (situs) of exchange tokens.

Business Relief: be cautious

Business Relief can reduce the value of shares in a trading company for Inheritance Tax. Three parts of HMRC's guidance matter for a company that holds bitcoin:

• Investment businesses. Relief is not due where the business consists wholly or mainly of making or holding investments.
• Wholly or mainly. HMRC looks at the main activities, assets and sources of income or gains over a reasonable period before the transfer, in the round.
• Excepted assets. Even where relief is due, assets that were not used for the business, or required for its future use, can be left out of the relief.

Source: HMRC: IHTM25261: business relief, investment businesses, HMRC: IHTM25265: business relief, the wholly or mainly test, HMRC: IHTM25351: business relief, excepted assets.

From 6 April 2026, 100% relief on the combined value of qualifying business and agricultural property is limited by an allowance. HMRC says that for individuals who die on or after that date, the allowance is £2.5 million, and value above it gets relief at 50%. An unused allowance of a spouse or civil partner who died earlier can increase it, up to £5 million.

Source: HMRC: IHTM25510: the 100% agricultural and business relief allowance from 6 April 2026, HMRC: IHTM25520: the 100% relief allowance for individuals, £2.5 million and transfer between spouses.

Our judgement, not a rule: a trading company that holds a modest amount of bitcoin as surplus treasury may still be a trading company, but the bitcoin itself may be treated as an excepted asset. A company whose bitcoin has grown to dominate its balance sheet may be at risk of being seen as mainly holding investments. Nobody can tell you the answer from a web page. Ask a specialist adviser, and ask again if the holding grows.

UK: will and letter of wishes

A will deals with who inherits the shares. A letter of wishes is usually a separate, private note to executors. Ask your solicitor how to make sure the executors know that the company holds bitcoin, which advisers to call, and where the company's recovery procedure is kept, without putting any secret in writing.

US: keeping the company working

For a corporation, the bylaws and any shareholder agreement say how directors are replaced. For an LLC, the operating agreement usually says who manages it and what happens on a member's death. State law fills gaps. Check that someone other than the owner can take control of the company, and then of its bitcoin under the treasury policy.

US: federal estate tax

The IRS says the estate tax is a tax on the right to transfer property at death, using the fair market value of what the person owned. For an owner, that includes the shares or membership interest, whose value reflects the company's bitcoin. The IRS says the basic exclusion amount for 2026 is $15,000,000, and the annual gift exclusion is $19,000. Most small company estates will be below the federal threshold, but some states have their own estate or inheritance taxes with lower thresholds. Check with your adviser.

Source: IRS: Estate tax, IRS: What's new: estate and gift tax ($15,000,000 basic exclusion and $19,000 annual exclusion for 2026).

Basis: the shares step up, the bitcoin does not

Section 1014 generally gives property acquired from a decedent a basis equal to its fair market value at the date of death. For an owner of a company, that applies to the shares the heirs receive. The company's own basis in its bitcoin is unchanged, so a later sale by the company is still taxed on the gain over the company's original cost. This matters if heirs plan to sell the bitcoin or the company.

Source: Cornell LII (unofficial copy of the US Code): 26 U.S.C. 1014: basis of property acquired from a decedent, IRS: Publication 551, Basis of assets.

Paying estate tax over time

Where a closely held business interest is more than 35% of the adjusted gross estate, section 6166 allows estate tax on it to be paid in up to 10 instalments, with the first payment deferred by up to 5 years. Passive assets are excluded when working out the value of the business. Whether bitcoin held by the company counts as a passive asset is a question for your adviser.

Source: Cornell LII (unofficial copy of the US Code): 26 U.S.C. 6166: extension of time to pay estate tax where the estate consists largely of an interest in a closely held business.

US: will, trust and letter of instruction

Owners often use a will, a revocable trust, or both. A letter of instruction is a plain note, not a legal document, that tells the executor or trustee where things are and who to contact. As in the UK, it should never contain recovery words or PINs. Ask your estate lawyer how your state treats each document.

A checklist for the owner

1. Make sure the company has a second director or a clear route to appoint one.
2. Confirm the treasury policy names who can act on the bitcoin if you cannot. Test it with a recovery drill.
3. Tell your solicitor or estate lawyer that the company holds bitcoin, how much, and how it is held.
4. Ask a tax adviser about Business Relief in the UK, or estate tax and basis in the US, before the holding grows further.
5. Write a letter of wishes or instruction that points to people and places, never to secrets.
6. Review all of this once a year, and after any big change in the holding.

Read next

• Keyholder continuity: illness, death or departure, and the handover template.
• Selling the company: valuation and due diligence.
• Bitcoin by business type: sole traders, partnerships, LLCs and corporations.

Sources

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

1. GOV.UKSearch probate records for documents and wills
2. legislation.gov.ukCompanies (Model Articles) Regulations 2008, Schedule 1: model articles for private companies limited by shares
3. HMRCCRYPTO25000: cryptoassets for individuals, Inheritance Tax
4. HMRCCRYPTO22600: location (situs) of exchange tokens
5. HMRCIHTM25261: business relief, investment businesses
6. HMRCIHTM25265: business relief, the wholly or mainly test
7. HMRCIHTM25351: business relief, excepted assets
8. HMRCIHTM25510: the 100% agricultural and business relief allowance from 6 April 2026
9. HMRCIHTM25520: the 100% relief allowance for individuals, £2.5 million and transfer between spouses
10. IRSEstate tax
11. IRSWhat's new: estate and gift tax ($15,000,000 basic exclusion and $19,000 annual exclusion for 2026)
12. Cornell LII (unofficial copy of the US Code)26 U.S.C. 1014: basis of property acquired from a decedent
13. IRSPublication 551, Basis of assets
14. Cornell LII (unofficial copy of the US Code)26 U.S.C. 6166: extension of time to pay estate tax where the estate consists largely of an interest in a closely held business

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