Tax Manager
Myna
Divorce proceedings are often financially complex. The increasing prevalence of cryptoassets is introducing an additional layer of difficulty for separating couples and their advisers.
As digital assets become more mainstream, they are appearing more frequently in financial settlements. Yet many individuals involved in divorce proceedings remain unfamiliar with how these assets are held, valued, or disclosed.
This lack of understanding can create a significant information gap. In some cases, one spouse may hold cryptoassets without the other fully appreciating what it is or how it works. In others, digital assets may simply be overlooked because they do not resemble traditional financial holdings such as bank accounts, pensions, or property.
For family lawyers and divorce practitioners, recognising when cryptoassets may form part of the financial landscape is becoming increasingly important.
Why crypto can be difficult to identify
Unlike traditional investments, cryptoassets are not always held through a centralised institution such as a bank or brokerage. Instead, it can be stored in digital wallets that are controlled directly by the owner. These wallets may exist as accounts on exchanges, mobile apps, hardware devices, or encrypted files that store cryptographic keys controlling the assets.
Because of this structure, digital assets may not appear clearly within standard financial documentation. Bank statements might show transfers to a cryptoasset exchange, but the assets themselves sit elsewhere. If an individual uses multiple exchanges or transfers assets between private wallets, tracing ownership can become more complex.
However, this does not mean cryptoassets are invisible. Most major blockchain networks record transactions permanently on a public ledger. The challenge is not that the information does not exist, but that it requires the right expertise to interpret it.
Indicators that digital assets may exist
In practice, there are often clues that cryptoasset holdings may be present. Transactions to well-known exchanges can appear on bank or credit card statements. References to trading platforms or crypto applications may also appear within financial records.
In some cases, individuals may disclose involvement in digital assets but underestimate or misunderstand the value of their holdings. Cryptoasset prices can fluctuate significantly, and assets acquired several years earlier may now be worth far more than originally expected.
For legal advisers, asking clear and direct questions about digital asset activity can be an important first step in ensuring that financial disclosure is complete.
Understanding how crypto is held
Cryptoassets can be stored in several ways. Many investors use exchanges that operate similarly to online trading platforms. Others move their assets into private wallets that they control directly. These wallets can exist as software applications or as physical devices designed to store cryptographic keys securely.
Transfers between wallets are common, and assets can move across different platforms quickly. As a result, reviewing the history of transactions is often necessary to understand where digital assets are currently held and how they have been managed over time.
This process may involve forensic accounting or specialist blockchain analysis in more complex cases.
Tax considerations in divorce settlements
When cryptoassets form part of a financial settlement, tax implications should not be overlooked. In the UK, cryptoassets are generally treated as property for tax purposes. Disposing of them, including selling, exchanging or transferring them in some circumstances, can trigger capital gains tax.
If one spouse transfers cryptoassets to the other as part of a divorce settlement, the timing and structure of that transfer can affect the tax outcome. In some situations, transfers between spouses or civil partners can often take place on a no gain, no loss basis for capital gains tax purposes. Since 2023, separating couples may have up to three tax years after separation to make such transfers.
Valuation is also important as cryptoasset prices can move quickly, agreeing on the value of digital assets at the time of settlement can be challenging.
Increasing transparency around digital assets
Regulatory reporting around cryptoassets is evolving rapidly. Exchanges are under increasing pressure to comply with anti-money laundering requirements and to share information with tax authorities. International initiatives such as the OECD Crypto-Asset Reporting Framework are designed to standardise how cryptoasset transactions are reported across jurisdictions. As these rules are implemented, tax authorities will gain greater visibility over digital asset activity held on regulated platforms.
While cryptoassets once carried a reputation for anonymity, the reality today is more nuanced. Blockchain technology creates permanent transaction records, and as regulatory frameworks develop, the ability to identify and analyse digital asset activity continues to improve.
A growing area of financial complexity
For many separating couples, cryptoassets will simply be one part of a broader financial picture. However, its presence can complicate disclosure and valuation if it is not properly understood.
The key for advisers and individuals alike is awareness and appropriate enquiry. Asking the right questions, recognising the signs that digital assets may exist, and seeking specialist
advice where necessary can help ensure that financial settlements are based on a complete and accurate view of the assets involved.
As digital assets continue to move into the financial mainstream, their role in divorce proceedings will likely become more common. Ensuring that both parties understand how these assets work is an important step toward achieving fair and transparent financial outcomes.
About Louise Mackie
Louise Mackie is a Tax Manager at Myna Accountants, where she leads the firm’s tax team and oversees the delivery of tax advisory and compliance services.
She works with a wide range of clients, including individuals and sole traders, with a particular focus on cryptoasset taxation.
Louise advises clients on the tax implications of digital asset transactions and investments, while also supporting those outside the crypto sector with personal and business tax planning, compliance, and practical guidance.
She is known for translating complex tax rules into clear, actionable advice, helping clients make informed financial decisions.