Sources checked 11 November 2026. This page is about a company that already holds bitcoin and is considering a distribution of some of it to shareholders. It is education, not advice, and it is not a reason to pay a dividend, in bitcoin or otherwise. If anything here conflicts with a linked source, the source wins.
Short answer
In the UK, a company may only make a distribution out of profits available for the purpose. When the distribution is a non-cash asset, including bitcoin, the Companies Act has special rules for the amount and for unrealised profits. Separately, HMRC treats giving exchange tokens to another person as a disposal at market value for Corporation Tax, unless a group or charity exception applies. In the US, a distribution of property to a shareholder is generally tested under section 301, and section 311(b) makes the corporation recognise gain as if it had sold appreciated property for fair market value. Whether the company may pay a dividend in property at all is a question of the law of its state of incorporation. Delaware, as one example, allows dividends in cash, in property or in shares, out of surplus or, in a limited case, out of net profits. Other states differ, and this site has not checked every state.
UK
Distributable profits
Section 830 of the Companies Act 2006 says a company may only make a distribution out of profits available for the purpose. Those profits are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made. The section is subject to further rules, including for investment companies, which this page does not cover.
A revaluation gain shown in the accounts is not, by itself, a realised profit. That point already appears in our FRS 102 guide. Agree with your accountant whether any profit being used to support a distribution has actually been realised.
Distributions in kind: the amount
Section 845 applies when a distribution consists of, includes, or is treated as arising in consequence of, the sale, transfer or other disposition by a company of a non-cash asset, and at that time the company has profits available for distribution (with a further condition that, if the amount is determined under this section, the company could make the distribution without contravening Part 23).
The amount of the distribution, or the relevant part of it, is then taken to be zero if the consideration is not less than the book value of the asset; otherwise, it is the amount by which the book value exceeds the consideration. For the profits test, profits available for distribution are treated as increased by any excess of consideration over book value. Book value means the amount at which the asset is stated in the relevant accounts, or zero if it is not stated.
Source: legislation.gov.uk: Companies Act 2006, section 845: distributions in kind, determination of amount.
Section 846 applies where any part of the amount at which that asset is stated in the relevant accounts represents an unrealised profit. That profit is treated as a realised profit for the purpose of determining the lawfulness of the distribution, and for certain accounts rules about realised profits.
Bitcoin held by a UK company is usually a non-cash asset in this sense: HMRC does not consider current types of cryptoasset to be money or currency. The Companies Act sections above do not name bitcoin. They apply to a non-cash asset. How they apply to a particular holding, and to the book value in the company's accounts under FRS 102 or FRS 105, is a question for the company's accountant and legal adviser.
Source: HMRC: CRYPTO41050: Corporation Tax, introduction, legislation.gov.uk: Companies Act 2006, section 845: distributions in kind, determination of amount.
Corporation Tax: a transfer of tokens can be a disposal
HMRC says that if a company holds exchange tokens as an investment, it is liable to Corporation Tax on gains it realises when it disposes of them. CRYPTO41250 says a disposal is a broad concept and includes selling tokens for money, exchanging them for a different type of token, using tokens to pay for goods or services, and giving away tokens to another person.
If a company gives away exchange tokens to another company which is not a member of the same group, or to an individual or other entity, the company must work out the market value of what it gave away and use that to calculate any chargeable gain. The recipient is treated as having acquired the tokens at that market value. There is no disposal if the company retains beneficial ownership, for example by moving tokens between addresses it beneficially controls.
Source: HMRC: CRYPTO41200: Corporation Tax on chargeable gains, introduction, HMRC: CRYPTO41250: what constitutes a disposal.
The Cryptoassets Manual page we opened does not use the word "dividend". A distribution of bitcoin to a shareholder is, in substance, a transfer of tokens by the company to another person, and the company no longer has beneficial ownership of those tokens. On the wording of CRYPTO41250, a gift of tokens to an individual or other entity is a disposal at market value. We have not found a CRYPTO manual page that works through a dividend in kind as a separate case. Confirm the treatment, including any connected-person or market-value rules that may also apply, with your accountant before any coins move. Allowable costs follow CRYPTO41300 and the chargeable gains rules generally.
Source: HMRC: CRYPTO41250: what constitutes a disposal, HMRC: CRYPTO41300: allowable costs.
Not covered in detail here: the shareholder's own tax position on receiving a dividend in bitcoin. That is a separate question, and it differs for individual and corporate shareholders. This page focuses on the company's company-law and Corporation Tax position.
US
Federal income tax: sections 301 and 311(b)
The IRS treats virtual currency as property for federal tax purposes, so a distribution of bitcoin is a distribution of property, not of money.
Source: IRS: Notice 2014-21: virtual currency is treated as property for federal tax purposes (PDF).
Section 317(a) says that, for this part of the Code, "property" means money, securities and any other property, not including stock in the distributing corporation (or rights to acquire that stock). Section 301(a) says a distribution of property by a corporation to a shareholder with respect to its stock is treated as provided in section 301(c). The amount of a distribution is the amount of money received plus the fair market value of the other property received, reduced by certain liabilities, with fair market value determined as of the date of the distribution. The portion that is a dividend is determined under section 301(c)(1) and the definition of a dividend in section 316, which looks to earnings and profits.
Source: Cornell LII: 26 U.S.C. 317: property defined for this part, Cornell LII: 26 U.S.C. 301: distributions of property, Cornell LII: 26 U.S.C. 316: dividend defined.
Section 311(a) says that, except as provided in subsection (b), no gain or loss is recognised to a corporation on a distribution (not in complete liquidation) with respect to its stock of its own stock or of property. Section 311(b) then provides that if a corporation distributes property (other than an obligation of the corporation) to a shareholder in a distribution to which subpart A applies, and the fair market value of that property exceeds its adjusted basis in the hands of the distributing corporation, gain shall be recognised to the distributing corporation as if the property were sold to the distributee at its fair market value.
Source: Cornell LII: 26 U.S.C. 311: taxability of corporation on distribution.
In plain terms, a C corporation that distributes bitcoin worth more than its basis generally has a corporate-level gain as if it had sold the bitcoin for fair market value, and the shareholder has a distribution whose amount includes that fair market value. S corporations, partnerships and LLCs follow different federal rules; see the S corporation and LLC pages, and confirm the distribution rules with your adviser. This page does not work through those other entity types in full.
State law, with a Delaware example
Federal tax rules do not, by themselves, authorise a company to declare a dividend. Whether a company may pay a dividend, and whether it may pay it in property rather than cash, is a question of the law of its state of incorporation and of its certificate or articles and bylaws. This site has not checked every US state.
Delaware is one commonly used state of incorporation. 8 Del. C. 173 says that no corporation shall pay dividends except in accordance with that chapter, and that dividends may be paid in cash, in property, or in shares of the corporation's capital stock. 8 Del. C. 170(a) says the directors may declare and pay dividends either out of surplus, as defined in that title, or, if there is no such surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year, subject to a capital-preference limitation set out in the same subsection and to any restrictions in the certificate of incorporation.
Source: Delaware Code: 8 Del. C. 173: declaration and payment of dividends, Delaware Code: 8 Del. C. 170: dividends; payment.
Other states use different words, including different tests for surplus or earned surplus. Do not treat the Delaware example as a rule for a company incorporated elsewhere.
Board and records
Before any coins move, the board should be able to show the legal basis for the distribution, the valuation used, the units identified, and the approvals. A distribution to a director or shareholder is also a related-party transaction: see related-party bitcoin transactions. Sending the bitcoin itself should follow sending bitcoin safely, from the company's multisig, with a test amount first. For the tax calculation on a disposal, the company bitcoin gain calculator works through an illustrative sale, not a dividend, and is not a tax return.
Read next
- Related-party bitcoin transactions, when an insider is on the other side.
- Selling or rebalancing, if the company sells bitcoin and distributes cash instead.
- Giving bitcoin to charity, a different kind of transfer, with its own tax rules.
- Company tax on bitcoin, pooling, lots and disposals.
Sources
Primary sources only. Each link was checked on 11 November 2026. Rules change, so confirm the current version with your adviser.
- legislation.gov.ukCompanies Act 2006, section 830: distributions only out of profits available for the purpose
- legislation.gov.ukCompanies Act 2006, section 845: distributions in kind, determination of amount
- legislation.gov.ukCompanies Act 2006, section 846: distributions in kind, treatment of unrealised profits
- HMRCCRYPTO41050: Corporation Tax, introduction
- HMRCCRYPTO41200: Corporation Tax on chargeable gains, introduction
- HMRCCRYPTO41250: what constitutes a disposal
- HMRCCRYPTO41300: allowable costs
- IRSNotice 2014-21: virtual currency is treated as property for federal tax purposes (PDF)
- Cornell LII26 U.S.C. 301: distributions of property
- Cornell LII26 U.S.C. 311: taxability of corporation on distribution
- Cornell LII26 U.S.C. 316: dividend defined
- Cornell LII26 U.S.C. 317: property defined for this part
- Delaware Code8 Del. C. 170: dividends; payment
- Delaware Code8 Del. C. 173: declaration and payment of dividends
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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.
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