HMRC Crypto Reporting Is Tightening: What CARF Means for UK Crypto Holders
The Cryptoasset Reporting Framework (CARF) introduces systematic reporting for UK crypto transactions from 2026. What this means for record-keeping, inheritance planning, and probate readiness.
What is changing
The UK is implementing the Cryptoasset Reporting Framework (CARF), an OECD-developed standard that requires crypto service providers to report transaction data to HMRC. From 1 January 2026, UK-based exchanges, brokers, and custodial wallet providers must collect and report detailed information about their customers and transactions. This marks a fundamental shift: crypto transactions will become as visible to HMRC as traditional financial accounts. The UK is among the first group of 48 jurisdictions adopting CARF, with international data exchange beginning in 2027. Bitzo never holds client keys or funds and never requests seed phrases or private keys.
What information will be reported
Reporting cryptoasset service providers (RCASPs) must collect: customer name, date of birth, address, tax residency, and National Insurance number or Unique Taxpayer Reference; for companies, the company name, registration number, and address. Transaction data includes purchase and sale prices, transaction values, and cryptoasset types. All exchange transactions, transfers, and cash-outs are in scope. This data will be compiled into national reports and exchanged internationally with other tax administrations that have adopted CARF.
What this means for UK private clients
For individuals holding crypto in the UK, CARF means HMRC will have systematic visibility of exchange-based activity. Capital gains above the annual allowance are taxable, and HMRC has already increased nudge letters to suspected non-compliers. The practical implication: record-keeping is no longer optional. You need documentation of acquisition dates, cost basis, disposals, and wallet addresses for each transaction. For crypto inheritance planning, this creates an additional requirement: evidence packs that demonstrate ownership and transaction history, both for tax compliance and for executors administering estates.
What this means for accountants and advisers
Advisers should consider asking clients: Do you hold cryptocurrency? Where is it held (exchanges, self-custody, or both)? What records exist for acquisition costs and transaction history? Is there a recovery plan if something happens to you? These questions help surface compliance gaps and inheritance risks early. Bitzo works alongside accountants, solicitors, and wealth managers to help clients document their holdings and create structured recovery workflows. We provide operational coordination, not financial, legal, or tax advice.
How Bitzo helps operationally
Bitzo creates Policy Packs that document wallet inventories, trusted contact verification records, and recovery workflows. These serve dual purposes: supporting tax compliance by maintaining clear ownership evidence, and enabling crypto inheritance by ensuring executors can recover assets when the time comes. Our approach is strictly non-custodial. We never hold keys, never have access to funds, and never request seed phrases or private keys. We coordinate verification and documentation while clients remain in full control. To discuss how we can help, book a call or learn more about our process.
Disclaimer
Bitzo provides operational coordination, not financial, legal, or tax advice. The information in this article is for general guidance only and does not constitute professional advice. Consult a qualified adviser for your specific situation.
Frequently Asked Questions
When does CARF come into effect in the UK?
CARF regulations come into force on 1 January 2026. Data collection begins for calendar year 2026, with international data exchange starting in 2027.
Does CARF apply to self-custody wallets?
CARF applies to reporting cryptoasset service providers (exchanges, brokers, custodial wallets). Self-custody wallets are not directly captured, but transfers between self-custody and exchanges are reportable.
What records should I keep for crypto inheritance planning UK?
Keep acquisition records (date, amount, cost basis, source), disposal records (date, proceeds, recipient), wallet addresses, exchange statements, and evidence of ownership. For inheritance readiness, document wallet locations and recovery instructions separately from the assets themselves.
How does digital asset estate planning UK benefit from CARF preparation?
Preparing for CARF requires the same documentation that executors need: clear records of what exists, where it is held, and how it can be accessed. Building this documentation now serves both compliance and inheritance readiness.
What happens if I do not comply with CARF reporting?
Individuals who provide false self-certifications to their crypto service providers may face penalties. Service providers can be penalised up to three hundred pounds per user for late, inaccurate, or incomplete reports.
Does Bitzo hold keys or provide custody?
No. Bitzo operates on a strictly non-custodial basis. We never hold private keys, never have access to client funds, and never request seed phrases. We coordinate documentation and verification processes while clients remain in full control.
How does crypto probate UK work with CARF data?
Executors administering estates will benefit from CARF data when requesting information from exchanges. However, self-custody assets still require separate recovery documentation. Bitzo helps create this documentation in advance.
What is the role of non-custodial crypto security UK in CARF compliance?
Non-custodial holders remain in control of their keys. CARF captures exchange activity, but self-custody activity is not directly reported. Good record-keeping and documented recovery processes remain essential for both compliance and inheritance.
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