Cryptocurrency transfer to spouse living abroad

My spouse is currently working abroad for long enough that he is tax resident in that country for now; he will return to the UK once his contract is completed. We frequently travel to see each other. In order to support him, I wanted to transfer some cryptocurrency that I invested in. How would HMRC see this from a CGT perspective? Would we have to declare the transfer? How do we do so?

Hi,
There is no tax liability arising from the transfer of assets between spouses. Your husband would acquire the asset with the same acquisition costs that you incurred when buying the crypto. If he sold the crypto, then any capital gain calculation would use this value.
Thank you.

Thank you for the kind reply. I have a few follow-up questions: - Would be he due CGT in the UK if he is not currently tax resident in the UK? Or just the appropriate CGT rules of the country where he currently works and is tax resident? - Would we have to inform anyone (HMRC, bank with cryptocurrency savings) that I am transferring to my husband? Thank you.

Hi, If there is a tax treaty between the UK and the individual's country of residence (Tax treaties), there will most likely be an article on capital gains.  This article would determine the taxation of any gains from the disposal of cryptocurrency.  If there is no treaty or capital gains article, then the gain would be taxable in the UK.
Thank you.

Hello. Yes just to clarify my husband works in The Netherlands and I understand there is a tax treaty between our two countries. He is based there almost all year round (around 11.5 months, coming home for Xmas). I would presume that his capital gains would apply to the Netherlands only but how would this work if the cryptocurrency is being transferred by me, his spouse, from the UK? Thank you.

Just to add that my husband currently has no UK-based income and isn’t required to fill in a self-assessment form. Thank you.

You first need to identify whether your husband is UK tax resident for the tax year - search for HMRC RDR3 for guidance. If he is UK resident then he will be liable to UK capital gains tax. The treaty does not protect him due to art 13(7). He may also be liable to tax in the Netherlands, in which case he should get credit for one country's tax against the other under the treaty. The country that has to be paid first will depend on where he has a permanent home or, if both, the "centre of his vital interests" which seems likely to be the UK. If he is tax resident only in the Netherlands, he would not have to pay UK capital gains tax. He may have to pay Dutch tax. However, if he is non-UK resident for five tax years or less, he could be taxed on his return under the "temporary non-resident" rules. Essentially, the treaty is unlikely to protect your husband unless he is non-resident for more than 5 tax years.

Hi
As not resident he has no CGT in the UK on the transfer of the crypto.