Last checked 1 November 2026. Closing a company has legal and tax consequences that depend on its facts. Your accountant, and in a liquidation an insolvency practitioner, decide how the rules apply. If anything here conflicts with the linked source, the source wins.
A company that holds bitcoin and wants to close has the same choices as any other company. The bitcoin adds three questions: who will move it, whether it is sold or handed to shareholders, and how that is taxed. This page sets out the official rules in the UK and the US, side by side.
The short version
- Decide early whether the bitcoin will be sold for cash or distributed to shareholders. Both are disposals by the company for tax.
- Deal with the bitcoin before the company stops existing. In the UK, anything left when a company is struck off goes to the Crown.
- Keep the keys working until the very end: a 2 of 3 multisig still needs two keyholders to sign the final transactions.
- Keep the records. GOV.UK says to keep business documents for 7 years after strike off.
UK: the two routes for a solvent company
GOV.UK says a company that can pay its bills can either apply to be struck off the Companies Register or start a members' voluntary liquidation. It says striking off is usually the cheapest way to close a company. A company that cannot pay its bills is insolvent, and different rules apply.
Source: GOV.UK: Closing a limited company (solvent or insolvent, dormant).
| Strike off (dissolution) | Members' voluntary liquidation | |
|---|---|---|
| Who runs it | The directors. | An authorised insolvency practitioner appointed as liquidator, who takes control of the company. |
| Conditions | GOV.UK lists: no trading or selling off of stock in the last 3 months, no change of name in the last 3 months, not threatened with liquidation, no agreements with creditors. | The directors make a declaration of solvency that the company can pay its debts, with interest, within 12 months. |
| Bitcoin | The directors sell or distribute it before applying. | The liquidator deals with it, so the liquidator needs a working way to control it. |
Source: GOV.UK: Strike off your limited company from the Companies Register: overview and eligibility, GOV.UK: Liquidate your limited company: members' voluntary liquidation.
Our judgement, not a rule: whether selling bitcoin in the 3 months before applying counts as trading or selling off stock for the strike off conditions depends on the company's facts. Ask your accountant before you sell close to the date.
UK: assets, the Crown and the £25,000 rule
GOV.UK says business assets should be shared among the shareholders before the company is struck off, and that anything left goes to the Crown, including payments the company receives later. It also says that money shareholders receive on strike off is usually subject to Capital Gains Tax, but if the amount is worth more than £25,000 it is treated as income and Income Tax applies. A members' voluntary liquidation is the usual route when larger sums are returned.
For the company, HMRC treats giving bitcoin away, including to shareholders, as a disposal. The company works out a chargeable gain or loss using the market value of the bitcoin at the time.
Source: HMRC: CRYPTO41250: Corporation Tax on chargeable gains, what counts as a disposal.
Company law has its own rule for valuing a distribution in kind. Under section 845 of the Companies Act 2006, if the company has distributable profits, the amount of the distribution is worked out by reference to the book value of the asset in the accounts. This affects the paperwork for a dividend in kind, not the tax.
Source: legislation.gov.uk: Companies Act 2006, section 845: distributions in kind, determination of amount.
UK and US: the keys at the end
Agree the plan
The board minutes whether the bitcoin is sold or distributed, to whom, and in what proportions.
Collect receiving details
For a distribution, each shareholder gives an address in writing, checked by a second route and with a test payment, as on our page on sending bitcoin safely.
Sign the final transactions
Two keyholders sign. Record the transaction IDs and the market value at the time of each transfer.
Keep the evidence
Keep the wallet export, the transaction IDs and the minute with the company's records.
US: Form 966 and the final returns
The IRS says a corporation must file Form 966 if it adopts a resolution or plan to dissolve or liquidate any of its stock, and must file its final income tax return with the final return box checked: Form 1120 for a C corporation, or Form 1120-S and final Schedules K-1 for an S corporation. Dissolving the company under state law is a separate step with the state.
Source: IRS: Closing a business: corporation filing requirements, Form 966 and final returns, IRS: About Form 966, Corporate Dissolution or Liquidation.
US: liquidating distributions of bitcoin
The IRS treats bitcoin as property. Under section 336 of the Internal Revenue Code, a corporation recognises gain or loss on property it distributes in a complete liquidation as if it had sold the property at fair market value. Under section 331, shareholders treat amounts received in a complete liquidation as full payment in exchange for their stock.
Source: IRS: Notice 2014-21: virtual currency is treated as property for federal tax purposes, Cornell LII (unofficial copy of the US Code): 26 U.S.C. 336: gain or loss recognised on property distributed in complete liquidation, Cornell LII (unofficial copy of the US Code): 26 U.S.C. 331: gain or loss to shareholders in corporate liquidations.
Outside a liquidation, section 311(b) makes a corporation recognise gain when it distributes appreciated property to a shareholder. The US Code is linked here through Cornell LII, an unofficial but widely used copy, because the official House site did not load for our checks.
Our judgement, not a rule: S corporations, consolidated groups and state taxes add rules not covered here. Bring this page to your CPA rather than relying on it.
Read next
- Selling the company, the other way to exit.
- Directors' duties, including when creditors come first.
- Audit evidence, proving control of the final balance.
Sources
Primary sources only. Each link was checked on 1 November 2026. Rules change, so confirm the current version with your adviser.
- GOV.UKClosing a limited company (solvent or insolvent, dormant)
- GOV.UKStrike off your limited company from the Companies Register: overview and eligibility
- GOV.UKLiquidate your limited company: members' voluntary liquidation
- GOV.UKStrike off your limited company: close down your company (assets, the Crown, the £25,000 rule, records)
- HMRCCRYPTO41250: Corporation Tax on chargeable gains, what counts as a disposal
- legislation.gov.ukCompanies Act 2006, section 845: distributions in kind, determination of amount
- IRSClosing a business: corporation filing requirements, Form 966 and final returns
- IRSAbout Form 966, Corporate Dissolution or Liquidation
- IRSNotice 2014-21: virtual currency is treated as property for federal tax purposes
- Cornell LII (unofficial copy of the US Code)26 U.S.C. 336: gain or loss recognised on property distributed in complete liquidation
- Cornell LII (unofficial copy of the US Code)26 U.S.C. 331: gain or loss to shareholders in corporate liquidations
- Cornell LII (unofficial copy of the US Code)26 U.S.C. 311(b): distributions of appreciated property
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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.
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.
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