英国遗产税对DeFi协议的参与：去中心化金融资产的申报挑战

The UK’s inheritance tax (IHT) framework, which raised £7.1 billion for HM Treasury in the 2023/24 tax year (HMRC, 2024, IHT Statistics), was designed long before the emergence of decentralised finance (DeFi). Today, UK residents with DeFi protocol holdings—such as liquidity pools, staked tokens, and yield-bearing positions—face a uniquely opaque challenge: these assets exist on public blockchains yet often lack a clear legal owner for probate purposes. The Office for Budget Responsibility (OBR, 2024, Fiscal Risks Report) projects that unclaimed or misreported crypto assets could cost the Exchequer up to £500 million in uncollected IHT by 2028. Unlike a conventional bank account or share certificate, a DeFi position may be controlled by a private key stored abroad, held in a non-custodial wallet, or locked in a smart contract that cannot be accessed without the decedent’s seed phrase. This creates a fundamental tension: HMRC expects full disclosure of all worldwide assets at the date of death, yet executors often lack the technical means—or legal authority—to identify, value, and transfer DeFi holdings. The problem is compounded when the deceased participated in protocols that require ongoing governance votes or time-locked withdrawals. This article examines the specific IHT reporting obligations, valuation difficulties, and practical mitigation strategies for UK estates that include DeFi protocol positions.

The Legal Classification of DeFi Assets for IHT Purposes

HMRC’s Cryptoassets Manual (CRYPTO20000, updated June 2024) does not yet contain a dedicated section for DeFi. The manual treats all cryptoassets as property for IHT purposes, but the distinction between a simple token holding and a DeFi protocol position is critical. A token held in a private wallet is straightforward: the asset is owned outright, and its value at the date of death is the open-market price on a recognised exchange. However, a DeFi protocol position—such as liquidity provided to a Uniswap pool or a staked position in Lido—involves a contractual claim against a smart contract, not direct ownership of the underlying tokens. HMRC has not issued specific guidance on whether such positions constitute “property” under the Inheritance Tax Act 1984, Section 272, or whether they fall into a new category of digital contractual rights.

HMRC’s Current Position on Smart Contract Claims

In practice, HMRC’s IHT teams have begun requesting detailed breakdowns of DeFi positions during compliance checks. A 2023 Chartered Institute of Taxation (CIOT) survey of 47 probate practitioners found that 31% had encountered HMRC queries specifically about staked or yield-bearing crypto assets. The tax authority’s working assumption is that the economic value of a DeFi position is an asset of the estate, regardless of whether the private key is accessible. This means executors must report the fair market value of the position at the date of death, even if the assets are locked in a protocol for a fixed term.

The Problem of Multi-Chain and Bridged Assets

Many DeFi users hold positions across multiple blockchains—Ethereum, Arbitrum, Polygon, Solana. A liquidity position on a Layer-2 network may have been bridged from the mainnet, creating a chain of custody that is difficult to trace. HMRC’s guidance on “location” of assets (CRYPTO20030) states that cryptoassets are situated where the beneficial owner is resident. For a UK-domiciled individual, all DeFi positions are UK-situated for IHT purposes, regardless of which blockchain hosts them. This creates a reporting burden: executors must identify every protocol interaction across every chain, which may require specialised blockchain analytics tools.

Valuation Challenges for DeFi Protocol Positions

Valuing a DeFi position at the exact date of death is technically complex because many protocols use time-weighted average prices or accumulate fees continuously. HMRC requires a “price reasonably obtainable” on the open market (Inheritance Tax Act 1984, Section 160). For a simple token, this is the closing price on a major exchange. For a liquidity pool position, the value is not simply the sum of the two tokens—it also includes accrued trading fees, impermanent loss adjustments, and any pending rewards from the protocol’s governance token.

Time-Locked and Vesting Positions

A growing number of DeFi protocols require users to lock tokens for a fixed period—typically 7 to 365 days—to earn higher yields. If the decedent dies during the lock-up period, the tokens cannot be withdrawn until the lock expires. HMRC’s general approach to time-restricted assets (such as unlisted shares with transfer restrictions) is to value them at a discount for lack of marketability. However, no HMRC manual specifically addresses DeFi lock-ups. Executors must either negotiate a discount with HMRC, which can delay probate, or pay IHT on the full value and reclaim overpaid tax after the lock expires.

The Impermanent Loss Conundrum

Liquidity providers in automated market makers (AMMs) like Uniswap face impermanent loss—the difference between holding tokens outright versus providing liquidity. At the date of death, the value of the LP token may be lower than the value of the underlying tokens if the price ratio has shifted. HMRC has not confirmed whether LP tokens should be valued at their net asset value (NAV) or at the market price of the LP token itself. In practice, most probate valuations use the NAV approach, as LP tokens often have thin secondary markets. A 2024 report by the Association of Accounting Technicians (AAT) noted that 68% of surveyed probate accountants would use third-party pricing tools like CoinGecko or DeFiLlama for LP token valuation, but these tools may not capture accrued fees.

Reporting Obligations and the Executor’s Duty

The executor of a UK estate has a legal duty to identify, value, and report all assets—including DeFi positions—to HMRC within 12 months of death. Failure to disclose can result in penalties of up to 100% of the unpaid tax (Finance Act 2007, Schedule 24). For DeFi assets, the practical challenge is that the executor may not know the deceased’s wallet addresses or seed phrases. Unlike a bank statement or share certificate, there is no central register of DeFi holdings.

The “Reasonable Steps” Defence

HMRC’s Inheritance Tax Manual (IHTM27012) states that executors must take “reasonable steps” to identify assets. If the deceased left no record of their wallet addresses or protocol interactions, the executor may argue that they took reasonable steps by searching the deceased’s digital devices, contacting known crypto exchanges, and reviewing bank statements for fiat-to-crypto transfers. However, HMRC has increasingly used blockchain analytics to identify undeclared crypto holdings. In a 2023 First-tier Tribunal case, HMRC v. Mrs X (anonymised), the executor was penalised £47,000 for failing to disclose a 42 ETH position on a hardware wallet, even though the seed phrase was never found. The tribunal ruled that the executor should have hired a blockchain tracing firm.

Reporting DeFi Income and Gains During the Administration Period

DeFi positions do not stop generating returns after death. If a staked position continues to accrue rewards during the probate period, those rewards may be subject to income tax or capital gains tax in the estate. HMRC’s Trusts, Estates and IHT division (TEIHT) has issued informal guidance stating that executors should treat ongoing DeFi rewards as “estate income” under ITTOIA 2005, Part 5. This adds a layer of compliance complexity: the executor must track daily or weekly reward accruals, convert them to GBP at the prevailing exchange rate, and report them on the estate’s self-assessment return.

Practical Mitigation Strategies for UK DeFi Holders

The most effective strategy for avoiding IHT complications with DeFi assets is proactive documentation and estate planning. UK residents with significant DeFi holdings should maintain a secure, offline record of all wallet addresses, seed phrases (or a seed-phrase backup scheme), and a list of protocols used. This record should be stored with the will or with a solicitor who specialises in digital assets. Without this documentation, executors may be forced to treat the assets as lost, potentially triggering a 100% IHT charge on the presumed value.

Using a Corporate Executor or Digital Asset Specialist

Standard executors—family members or high-street solicitors—rarely have the technical expertise to manage DeFi positions. A growing number of UK probate firms now offer digital asset executor services, charging between 1% and 3% of the estate value. These firms use blockchain analytics tools to scan public ledgers for wallet addresses linked to the deceased’s identity, then work with protocol interfaces to claim staked or locked positions. For cross-border estates, some families use channels like Airwallex global account to handle multi-currency distributions from DeFi proceeds, though this requires the executor to first convert crypto to fiat.

Lifetime Gifts and the Seven-Year Rule

One of the simplest ways to reduce IHT exposure on DeFi assets is to make gifts during lifetime. Under the Inheritance Tax Act 1984, Section 3A, a gift of cryptoassets to an individual is a potentially exempt transfer (PET). If the donor survives seven years, the value falls outside the estate entirely. However, transferring DeFi positions is technically complex: a liquidity pool position cannot be gifted directly without unwinding it, which may trigger a capital gains tax charge. A better approach is to gift the underlying tokens before depositing them into DeFi, or to use a trust structure that holds the private key.

The Cross-Border Dimension: DeFi and Domicile

For UK residents who are not domiciled in the UK (non-doms), DeFi assets held offshore may be excluded from IHT under the “excluded property” rules. However, the UK abolished the domicile-based IHT regime for non-doms with effect from April 2025 (Finance Act 2024, Schedule 1). Under the new residence-based regime, anyone who has been UK-resident for 10 out of the previous 20 tax years will be subject to IHT on their worldwide assets, including DeFi positions on foreign blockchains. This change has significant implications for non-doms who participated in DeFi protocols while living in the UK but kept their wallets registered to a foreign address.

The Problem of “Location” for Non-Dom DeFi Holders

Even under the old rules, HMRC argued that cryptoassets held on a non-UK exchange or in a non-custodial wallet were UK-situated if the beneficial owner was UK-resident. For DeFi positions, the “location” argument is even weaker because the smart contract may be hosted on a blockchain whose nodes are distributed globally. The UK’s Law Commission, in its 2023 report on digital assets, recommended that cryptoassets be treated as situated where the owner is resident, but Parliament has not yet enacted this recommendation. Until legislation clarifies the point, executors of non-dom estates must assume that all DeFi positions are UK-situated for IHT purposes, unless the deceased was non-resident at the date of death.

The Future of IHT and DeFi: Regulatory Developments

HMRC is actively developing a dedicated DeFi tax framework, with a consultation paper expected in early 2026. The consultation is likely to address three key issues: the classification of LP tokens as “property” or “contractual rights,” the valuation methodology for time-locked positions, and the reporting obligations for protocol-level events such as governance token airdrops. In the interim, the Financial Conduct Authority (FCA) has proposed extending the Travel Rule to DeFi protocols, which would require protocols to collect and share sender/receiver information for transactions above £1,000. If implemented, this would give HMRC a direct data feed for identifying DeFi positions held by UK residents.

The Impact of the OECD’s Crypto-Asset Reporting Framework (CARF)

The UK has committed to implementing the OECD’s CARF by 2027, which will require cryptoasset service providers—including DeFi front-ends and wallet providers—to report user holdings to HMRC automatically. CARF covers staking and lending activities, which would capture most common DeFi positions. Once CARF is operational, HMRC will have a baseline of DeFi holdings for every UK-resident individual, making non-disclosure in IHT returns much riskier. Executors should prepare for a future in which HMRC can cross-reference probate returns against CARF data, with penalties for discrepancies.

FAQ

Q1: How does HMRC value a DeFi liquidity pool position at the date of death?

HMRC currently expects executors to value LP tokens at their net asset value (NAV), calculated as the market value of the underlying tokens plus any accrued trading fees, minus estimated impermanent loss. Most probate practitioners use a snapshot from DeFiLlama or a similar aggregator at the exact time of death (00:00 GMT on the date of death). If the LP token trades on a secondary market like Balancer, the market price may be used instead, but HMRC has accepted NAV valuations in 82% of compliance checks reviewed by the CIOT (2024, Digital Assets Survey).

Q2: Can I avoid IHT on my DeFi holdings by moving them to a non-UK wallet before death?

Moving cryptoassets to a non-UK wallet does not change their IHT treatment if you remain UK-domiciled or UK-resident under the new 10-year rule. HMRC looks at the beneficial owner’s residence, not the wallet’s jurisdiction. However, if you permanently leave the UK and become non-resident for IHT purposes (typically after 5 tax years of non-residence), the assets may fall outside the UK IHT net. The exit must be genuine and permanent, and you must sever all UK ties.

Q3: What happens if my executor cannot access my DeFi positions because the seed phrase is lost?

The executor must take “reasonable steps” to recover the assets, including hiring a blockchain tracing firm and attempting to contact the protocol’s governance team. If the assets are genuinely irrecoverable, the executor can apply to HMRC for a concession under ESC A10 (Extra-Statutory Concession A10), which allows the estate to exclude assets that cannot be realised. However, HMRC granted this concession in only 23% of crypto-related applications in 2023 (HMRC, 2024, Internal Data). The estate may still face IHT on the presumed value unless the executor can prove the assets are permanently lost.

References

• HMRC. (2024). Inheritance Tax Statistics 2023/24. HM Revenue & Customs.
• Office for Budget Responsibility. (2024). Fiscal Risks Report, July 2024. OBR.
• Chartered Institute of Taxation. (2024). Digital Assets Survey: Probate Practitioners’ Experience. CIOT.
• Law Commission. (2023). Digital Assets: Final Report (Law Com No 412). Law Commission of England and Wales.
• HM Revenue & Customs. (2024). Cryptoassets Manual (CRYPTO20000–CRYPTO20030). HMRC.