HMRC Crypto Reporting Is Tightening: What CARF Means for UK Crypto Holders

By Simon Bumford, Founder · 2026-02-02 · 6 min read

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

Back to Insights 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.

What changes when crypto becomes 'reportable'

The 'reporting reality' impacts three areas: 1) Tax evidence Clients will increasingly need consistent, reconstructable records: • acquisition dates and cost basis, • disposals and values, • transfers between wallets/platforms, • staking/airdrops where relevant, • supporting evidence that matches platform records. 2) Compliance comfort Professionals and clients become more sensitive to: • provenance and source of funds, • clarity of ownership, • separation between personal and business holdings, • avoidance of mixing unknown third-party flows. 3) Estate administration Executors cannot administer what they cannot identify. Reporting regimes do not magically solve access, but they do make 'it's all a mystery' less credible.

The real client risk: 'invisible admin debt'

Most crypto problems only show up at the worst possible time: • a tax return enquiry, • a divorce, • a sudden death, • an incapacity scenario, • a major platform incident. If the client's crypto life is held together by memory, screenshots and phone notes, professionals inherit a painful problem: admin debt. CARF-style reporting increases the cost of this debt.

A practical, adviser-friendly readiness process

This is what good looks like, without custody and without building a trading operation. Step 1: Inventory the asset footprint List: • exchanges used (past and present), • self-custody wallets and devices, • key identifiers the client can locate later, • where evidence lives (password manager, encrypted storage, physical packs). Step 2: Make provenance easy to evidence Create a record of: • where funds came from (at a high level), • when the client moved from fiat to crypto, • major wallet migrations, • any high-risk mixing or unclear third-party transfers (if present). Step 3: Separate access from documentation Clients often store everything together (which creates theft risk). Better: • documentation that maps the environment, • access steps that are protected and layered, • a 'trusted contact / executor' pathway that is lawful and clear. Step 4: Add continuity planning Tax records do not help if nobody can access the asset or prove authority. Continuity needs: • role clarity, • step-by-step process, • 'what if compromised' escalation, • review cadence.

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. Back to Insights