Cryptocurrency creates a distinct and underappreciated problem in the context of death and estate administration. The CAT rules that apply to inherited crypto are not complicated — they follow the same principles as any other inherited asset. The practical problem is more fundamental: what happens to a crypto portfolio when the owner dies without having left their heirs the means to access it?
This article covers both the tax position and the practical access issue that every Irish crypto holder needs to address now, regardless of how healthy they are. It forms part of our complete cryptocurrency tax guide series.
The CAT Position: How Inherited Crypto Is Taxed
Capital Acquisitions Tax (CAT) applies to inheritances above the relevant group threshold. Cryptocurrency is a chargeable asset for CAT purposes — it is property, and its value is included in the estate.
The CAT calculation on inherited crypto follows the standard principles:
The market value of the cryptocurrency at the date of death is the value for CAT purposes. This is the open market price in euros on the date the deceased died (or within a reasonable period around that date if the exact date price is uncertain). For major cryptocurrencies (Bitcoin, Ethereum, and others with liquid markets and verifiable price data), obtaining the market value at a specific date is straightforward. For more obscure or illiquid tokens, valuation may require more analysis.
The value is assessed against the beneficiary’s applicable group threshold — €400,000 for a child inheriting from a parent, €40,000 for a sibling or nephew/niece, €20,000 for others. CAT at 33% applies on the excess.
Example: Patrick’s father dies leaving him an estate that includes €350,000 in Bitcoin at the date of death, a family home worth €280,000, and savings of €50,000 — total estate approximately €680,000. Against the €400,000 Group A threshold, the taxable amount is €280,000. CAT at 33% = approximately €92,400.
If Patrick’s father had received any prior gifts or inheritances from Patrick’s grandparents that used part of the Group A threshold, the remaining threshold would be reduced accordingly.
The Business Relief Question for Crypto
Business Relief reduces the value of qualifying business assets by 90% for CAT purposes. Cryptocurrency is not, in most cases, a qualifying business asset — it is an investment asset rather than an asset used in a trading business.
However, for a business where crypto is genuinely used as a trading asset — a crypto exchange, a payments business that holds crypto as part of its operations — there may be arguments that the crypto forms part of qualifying business assets. This is a complex area where the specific facts of the business matter enormously.
For the typical individual investor whose crypto is a personal investment portfolio, Business Relief does not apply and the full market value is included in the taxable estate.
The Executor’s Obligations
When someone dies holding cryptocurrency, the executor of the estate has legal responsibility for identifying and managing the crypto assets. This creates several practical challenges:
Identifying the holdings. The executor needs to know what crypto the deceased held, on which platforms, in which wallets. If this information was not communicated before death, it may be very difficult to discover.
Accessing the wallets. Centralised exchange accounts (Coinbase, Binance, etc.) require death certificates and grant of probate before an estate administrator can access them. The process is similar to a bank account. Most major exchanges have estate administration procedures, though they vary in efficiency.
Self-custody wallets (hardware wallets like Ledger or Trezor, or software wallets with seed phrases) are a different matter entirely. The executor must have the wallet’s private key or seed phrase to access the funds. Without these, the crypto is permanently inaccessible — it exists on the blockchain but is effectively locked forever.
Timing issues. CAT is assessed at the date of death valuation. But accessing and realising the crypto to pay the CAT may take months — during which the price may move significantly in either direction. If Bitcoin falls 40% between death and realisation, the estate has paid (or owes) CAT on a value that the estate can no longer achieve. If it rises, the estate benefits — but the CAT assessment is fixed at the date of death.
The Access and Security Problem: Act Now
This is the section of this article that I most want every Irish crypto holder to read.
If you hold significant value in cryptocurrency and you die without leaving your family the means to access it — seed phrases for hardware wallets, login credentials for exchanges, instructions for what to do — that value could be permanently lost.
The most extreme example is self-custody in a hardware wallet. A Ledger or Trezor generates a 24-word seed phrase when set up. This seed phrase is the master key to the wallet — it can regenerate the wallet on any device. If you die and no one knows the seed phrase, the crypto is permanently inaccessible. No court order, no probate grant, and no technical effort can recover it without the seed phrase.
For exchange accounts, the situation is better — exchanges have estate procedures — but still requires the executor to know that the account exists.
The correct action for any crypto holder is to:
Create a secure document that lists all crypto holdings — exchanges, wallet addresses, and the nature of each holding. Leave instructions for accessing seed phrases — not the seed phrases themselves in an unsecured document, but a clear explanation of where they are stored (a sealed envelope with a solicitor, a secure hardware store, a bank safety deposit box). Tell your executor or a trusted person that crypto exists and where the access instructions are. Update this document whenever your holdings change significantly — maintaining this alongside the record-keeping system we recommend for crypto CGT purposes is straightforward.
This is not a complex exercise. It takes an afternoon. And it ensures that an asset you have worked to build has the same chance of being passed on as your bank account or property.
CGT on the Executor’s Disposal
When the executor sells the crypto to realise funds for the estate, a CGT event arises. The acquisition cost for the estate’s CGT purposes is the market value at the date of death (the same value used for CAT). Any gain above that value — if the crypto appreciated between death and sale — is subject to CGT in the estate. The mechanics of how this gain is calculated follow the same principles outlined in our step-by-step guide to crypto CGT in Ireland.
The interaction between CGT and CAT on the same asset is something to manage carefully. The CAT credit (a credit that can be claimed against CGT where both taxes apply to the same event) may be available in certain circumstances to prevent full double taxation.
This is an area where specific professional advice at the estate administration stage is important.
Paddy Malone FCA AITI
Paddy is the principal of Malone & Co. Chartered Accountants in Dundalk. A Fellow of Chartered Accountants Ireland and a Chartered Tax Consultant with the Irish Tax Institute, he has been advising businesses across County Louth and the North-East for over 35 years.