Trustees Remain Cautious as Crypto Millionaires Pursue Offshore Trusts

Crypto entrepreneurs and early investors are increasingly looking to offshore trusts to preserve wealth across generations and reduce inheritance tax exposure. Despite growing demand, professional trustees remain hesitant to accept digital assets.

Why crypto holders want offshore trusts

• Separate assets from personal estates
• Potentially lower inheritance tax in certain jurisdictions
• Facilitate multi‑generational wealth transfer

Trustees’ main concerns

• Price volatility – A concentrated crypto position can lose significant value, challenging the fiduciary duty to preserve wealth.
• Custody and access – Self‑custody wallets require private‑key management; loss of keys can render assets irretrievable.
• Source‑of‑wealth verification – Tracing funds through multiple wallets and exchanges is complex, especially when transactions occur outside regulated institutions.
• Regulatory scrutiny – HMRC has intensified oversight, issuing thousands of warning letters to crypto taxpayers.

Industry perspective

Lawyers report that only a handful of trustees feel comfortable holding cryptocurrency directly. Some clients sell tokens before placing proceeds into a trust, while others seek trustees willing to manage the digital assets themselves. A few specialist trust firms are beginning to market crypto‑focused services, aided by improved screening tools that can trace transaction histories.

Regulatory and compliance backdrop

HM Revenue & Customs data show UK taxpayers disposed of £13.8 billion of crypto assets in the year to April 2025, with nearly 250 individuals reporting capital gains above £1 million. The tax authority has sent around 81,000 warning letters to investors suspected of underpaying taxes.

Future outlook

Trustees must balance fiduciary responsibilities with the evolving landscape of digital‑asset custody and compliance. As screening technology improves and specialist providers emerge, the gap between crypto wealth and traditional estate planning may narrow, but caution remains the prevailing stance.