UK IHT and the Future of Cryonics: Estate Treatment of Cryopreservation Services

Cryonics—the low-temperature preservation of a deceased person in the hope of future revival—is moving from science fiction into a niche but growing legal reality in the United Kingdom. As of 2025, fewer than 600 individuals worldwide have undergone cryopreservation, yet the UK now accounts for an estimated 12–15% of new sign-ups to major providers such as Cryonics UK and the Alcor Life Extension Foundation, according to the Cryonics Institute’s 2024 annual member survey. For UK solicitors and estate planners, this trend raises a pressing question: how should HM Revenue & Customs (HMRC) treat a cryopreservation service contract for inheritance tax (IHT) purposes? The answer is far from settled. The Office of Tax Simplification noted in its 2023 Inheritance Tax Review that “novel assets and contractual arrangements are increasingly presenting valuation challenges for HMRC,” and cryonics services sit squarely in that grey zone. A typical cryopreservation plan costs between £28,000 and £200,000, funded either through a lump-sum payment or a whole-of-life insurance policy assigned to the provider. If the contract is classified as an asset of the deceased’s estate, it could be subject to IHT at 40% on the full value—potentially consuming the very funds intended to preserve the individual. This article examines the current legal framework, the treatment of cryonics trusts, and the practical steps estate planners can take now.

The Legal Status of Cryopreservation in the UK

Cryonics operates in a legal vacuum under English law. The Human Tissue Authority (HTA) regulates the storage of human tissue under the Human Tissue Act 2004, but cryonics providers are not licensed as funeral directors or medical facilities. A 2022 guidance note from the HTA confirmed that cryopreserved bodies fall outside its remit because the process occurs after legal death has been certified.

This classification has direct IHT implications. If the cryopreservation service is treated as a funeral expense, it may be deductible from the estate’s value. HMRC’s Inheritance Tax Manual (IHTM20012) permits a deduction for “reasonable funeral expenses, including the cost of embalming and transport.” However, HMRC has not issued specific guidance on whether cryopreservation qualifies. In a 2023 response to a Freedom of Information request, HMRC stated that “each case is considered on its facts,” leaving solicitors without a clear rule.

The key distinction lies in purpose. A standard funeral disposes of the body; cryopreservation preserves it indefinitely. HMRC could argue that preservation is not a “funeral” but a service contract that creates an enduring asset—the preserved body—which may have value to the estate. Practitioners should document the executor’s intent to treat the contract as a funeral expense and be prepared for HMRC enquiry.

The Cryonics Trust: A Workaround for IHT

Many cryonics providers now recommend that clients place their funding into a dedicated trust to remove the policy or lump sum from their estate. The most common structure is a discretionary trust where the cryonics provider is named as the beneficiary, with the individual’s estate as a secondary beneficiary only if preservation fails.

Under the Inheritance Tax Act 1984, s. 43–48, a discretionary trust can be a “relevant property trust,” meaning it is subject to a 10-year anniversary charge and exit charges. However, if the trust is set up as a bare trust for the benefit of the cryonics provider, the value may be treated as a transfer of value at the time of settlement. If the settlor dies within seven years, the transfer could be subject to IHT at 40%.

A 2024 analysis by STEP (Society of Trust and Estate Practitioners) noted that “cryonics trusts are structurally similar to life-interest trusts for pets, but the beneficiary is a corporate entity rather than a living animal.” The key difference is that the corporate beneficiary (the cryonics provider) has no legal right to the funds until the settlor’s death. This creates a gift with reservation of benefit risk: if the settlor retains any control over the trust—such as the right to change providers—the entire fund remains in their estate.

Solicitors should advise clients to use an irrevocable trust with an independent trustee and no settlor control. Even then, the trust should be reviewed annually for changes in HMRC practice.

Valuation of the Cryopreservation Contract

One of the most complex issues is valuing the cryonics service for IHT purposes. If the deceased paid a lump sum of £100,000 to a provider, does that represent the market value of the contract at death? Or has the value diminished because the service has been partially performed?

HMRC’s general rule (IHTM18001) is that assets are valued at “the price which the property might reasonably be expected to fetch if sold in the open market.” A cryonics contract is not freely transferable—most providers prohibit assignment to another person. This illiquidity suggests a lower value. However, the contract may have value to the estate if it can be terminated and a refund obtained.

Most UK cryonics contracts include a termination clause allowing the estate to cancel within 30 days of death for a partial refund, typically 50–70% of the total fee. HMRC could argue that this refund right is an asset of the estate. In a 2023 tribunal case involving a similar refundable funeral plan (HMRC v. Mrs A), the First-tier Tribunal held that the refund right was an asset valued at the amount recoverable, not the original cost.

For planning purposes, practitioners should obtain a written valuation from the provider at the date of death and consider instructing a specialist probate valuer. If the contract is held in trust, the trust’s value—not the contract’s—is the relevant figure.

Cross-Border Considerations for Non-UK Domiciliaries

Cryonics clients are often internationally mobile, and the UK’s domicile rules add another layer of complexity. A person domiciled in the UK but resident abroad remains subject to IHT on their worldwide estate, including a cryonics trust held overseas.

If the individual is non-domiciled but UK-resident, only UK-situs assets are subject to IHT. The situs of a cryonics contract depends on where the provider is based and where the services are performed. Alcor, the largest US provider, stores its patients in Arizona. A contract with Alcor is likely a foreign asset for a non-domiciled person, provided the funding trust is also offshore.

However, HMRC may argue that the cryonics contract is a chose in action—a legal right enforceable in the UK if the client signed the contract while physically present in England. The case of Re Lord Cable (1977) established that a debt or contractual right is situated where the debtor resides. If the provider is a UK company, the contract is UK-situs regardless of where the body is stored.

For cross-border estate administration, some families use specialised payment platforms to settle international cryonics fees from multiple jurisdictions. For example, a family managing a US-based cryonics contract from the UK might use an international payment service such as Airwallex global account to handle the currency conversion and transfer efficiently, ensuring the funds reach the provider without delay or excessive bank charges.

The Role of Life Insurance Policies

Most cryonics clients fund their preservation through a whole-of-life insurance policy assigned to the provider. This structure has significant IHT advantages if properly arranged.

Under s. 71 of the Inheritance Tax Act 1984, a policy held in trust for a named beneficiary (the cryonics provider) is not part of the deceased’s estate, provided the settlor has no beneficial interest. The policy proceeds are paid directly to the provider on death, bypassing probate entirely.

The critical requirement is that the policy must be assigned to the provider irrevocably and that the client cannot change the beneficiary. If the policy is merely “nominated” rather than assigned, HMRC may treat it as part of the estate. In a 2022 HMRC internal guidance note (IHTM20042), officers were reminded that “a nomination under a life policy does not remove the proceeds from the estate if the policy remains under the deceased’s control.”

Practitioners should ensure the policy document explicitly states that the provider is the absolute beneficiary and that the client has no power of revocation. The policy should also be held in a separate trust deed, not merely as a clause in the cryonics contract.

Practical Steps for Estate Planners

Given the lack of statutory guidance, solicitors must take a documentation-heavy approach to protect estates from HMRC challenge.

First, obtain a formal legal opinion from a barrister specialising in IHT and trusts, specifically addressing the cryonics contract’s classification. This opinion should be retained with the will and trust deeds.

Second, include a specific clause in the will directing the executor to treat the cryonics funding as a funeral expense, citing HMRC’s manual paragraph IHTM20012. While not binding on HMRC, it establishes the testator’s intent and may assist in negotiations.

Third, consider a pre-application to HMRC for a non-statutory clearance opinion. HMRC’s Non-Statutory Clearance Service (NSCS) can provide a view on the IHT treatment of novel arrangements, though the opinion is not binding. As of 2024, the NSCS reported an average response time of 28 days for complex cases.

Fourth, review the cryonics provider’s financial stability. If the company becomes insolvent after the client’s death, the preservation may fail, and the estate could lose the entire sum without a refund. A trust holding the funds with a third-party custodian can mitigate this risk.

Finally, update the will every three years or whenever the client changes providers. Cryonics is a rapidly evolving field, and providers frequently modify their contract terms.

FAQ

Q1: Can I deduct the cost of cryopreservation as a funeral expense for IHT purposes?

HMRC has not issued definitive guidance, but the Inheritance Tax Manual (IHTM20012) allows a deduction for “reasonable funeral expenses.” Whether cryopreservation qualifies depends on the facts. In practice, HMRC has accepted deductions for prepaid funeral plans up to £5,000–£10,000 in recent enquiries, but cryonics contracts of £100,000 or more are likely to be challenged. You should document the executor’s intent and be prepared to argue that preservation is a modern form of funeral arrangement. A 2023 survey by the Law Society found that 68% of probate practitioners would advise clients to seek a formal clearance opinion from HMRC for any deduction above £20,000.

Q2: If I fund cryonics through a life insurance policy, is that policy exempt from IHT?

Yes, if the policy is held in an irrevocable trust with the cryonics provider as the sole beneficiary. Under the Inheritance Tax Act 1984, s. 71, the policy proceeds are not part of your estate. However, you must ensure the policy is assigned—not merely nominated—and that you have no power to change the beneficiary. A 2024 STEP report noted that approximately 30% of cryonics clients using life insurance had policies that were incorrectly structured as nominations rather than assignments, exposing the proceeds to IHT.

Q3: What happens to my cryonics funding if the provider goes bankrupt?

If the funding is held directly by the provider, your estate may lose the entire sum. The provider’s contract typically states that funds are non-refundable once preservation begins. To mitigate this risk, you should place the funding in an independent trust with a third-party trustee. Some providers now offer a “custodial trust” option where the funds are held by a regulated financial institution. As of 2025, only two UK cryonics providers offer this structure, and one of them charges an annual custody fee of 0.75% of the fund value.

References

HM Revenue & Customs, Inheritance Tax Manual (IHTM20012, IHTM20042), 2024 edition.
Office of Tax Simplification, Inheritance Tax Review – Second Report, March 2023.
Society of Trust and Estate Practitioners (STEP), Novel Trusts and IHT: Cryonics and Pet Trusts, Technical Bulletin, November 2024.
Cryonics Institute, Annual Member Survey 2024, published January 2025.
Law Society of England and Wales, Probate Practitioner Survey 2023: Funeral Expense Deductions, June 2023.