Crypto assets (also known as virtual currencies) are property with economic value, so even when they are transferred to family members free of charge, it may be necessary to check whether gift tax applies. In addition, how the giver's own taxes are calculated differs depending on whether the crypto assets are converted into cash before being handed over or transferred as crypto assets themselves.
If you gift crypto assets to family members without checking this beforehand, you may end up missing a tax filing or payment that was actually required. If a tax issue comes to light later, you could face not only the original tax amount but also additional penalty tax and delinquent tax on top of it.
Furthermore, crypto asset transfer records are recorded on the blockchain. Even for transfers between family members, rather than assuming that "it's fine as long as no one finds out," it is important to proceed with taxes and recordkeeping in mind.
This article explains the taxes involved in gifting crypto assets to family members, the main methods of making such a gift, how to think about the value of the gift, and points to watch for when managing the assets afterward.
Note on the current tax framework (as of July 2026): Under Japan's tax rules as they currently stand, gains from selling crypto assets are treated as miscellaneous income and taxed under the aggregate (progressive) taxation system. On July 15, 2026, an amended Financial Instruments and Exchange Act (FIEA) was passed by the House of Councillors, which will reclassify crypto assets as financial instruments under the FIEA; a flat 20% separate self-assessment tax rate is expected to take effect from the fiscal year after the amended law comes into force (expected around January 2028). Note also that losses from crypto transactions can only be offset against other miscellaneous income — they cannot be offset against employment income or other income categories.
Gifting Crypto Assets to Family Requires Checking Gift Tax
When giving crypto assets to a family member, the first thing to check is the gift tax on the recipient's side.
Crypto assets are property whose price fluctuates, and for tax purposes they are treated as having economic value. This means that even within a family — for example, between parent and child, or between spouses — transferring crypto assets free of charge may require checking whether gift tax applies.
This section organizes the reasoning behind why crypto assets can become subject to gift tax, and the points to watch for when gifting within the annual ¥1.1 million exemption.
Crypto Assets May Also Be Subject to Gift Tax
When crypto assets are gifted to a family member, the recipient may be liable for gift tax. Gift tax is a tax that applies when an individual receives property from another individual. The National Tax Agency (NTA) states the following about cases where crypto assets are acquired through inheritance or gift:
Where crypto assets are acquired from a decedent through inheritance, bequest, or gift, inheritance tax or gift tax is levied.
Source: Tax Treatment of Crypto Assets | National Tax Agency
Crypto assets fall under property that can be valued in monetary terms and carries economic value. In other words, even when a parent sends crypto assets to a child, or a spouse transfers crypto assets to another spouse, this may be treated as a gift for tax purposes.
One point that deserves particular attention is when crypto assets are transferred as-is, without being converted into Japanese yen. Even though no cash changes hands, because property with economic value is being transferred, it is still necessary to check whether gift tax applies.
Points to Check Even Within the Annual ¥1.1 Million Exemption
Gift tax has a basic exemption under the calendar-year taxation system. The NTA explains that gift tax is levied on the amount remaining after subtracting the basic exemption of ¥1.1 million from "the total value of property received as gifts during the year."
Accordingly, if the total value of gifted property received in a given year is ¥1.1 million or less, gift tax generally does not apply.
Gift tax is levied on the amount remaining after subtracting the basic exemption of ¥1.1 million under calendar-year taxation from the total value of property received as gifts during the one-year period from January 1 to December 31 of that year. Accordingly, if the total value of gifted property received during the year is ¥1.1 million or less, no gift tax is levied (in this case, no gift tax return is required).
However, this ¥1.1 million threshold is not judged based on crypto assets alone.
For example, suppose that in the same year you receive ¥800,000 worth of crypto assets from a parent and also receive ¥500,000 in cash. The combined total comes to ¥1.3 million. In this case, even though the crypto assets alone are under ¥1.1 million, the total value of gifts received during the year exceeds ¥1.1 million.
It is also not necessarily the case that staying within ¥1.1 million every year is always problem-free. The NTA indicates that even if you receive ¥1,000,000 per year for 10 years, if there is an agreement from the outset to provide a total of ¥10,000,000, this may be treated as a gift of a right to periodic payments.
Where it has been agreed (promised) between the donor and recipient that gifts of ¥1,000,000 will be made each year for 10 years, gift tax is levied in the year the agreement (promise) is made, on the basis that a right relating to periodic payments (the right under a contract to receive payments of ¥1,000,000 each year for 10 years) has been gifted, based on a periodic payment contract.
Even when gifting crypto assets to family members little by little, it is important to keep track of the amount gifted each year, the purpose of the gift, the date of each gift, and the agreement reached within the family.
Main Ways to Gift Crypto Assets to Family Members
Broadly speaking, there are two ways to gift crypto assets to family members. Depending on which one you choose, the clarity of the gift amount, how to check the applicable taxes, and the risks around transferring and managing the assets all differ.
- Converting to cash and gifting cash
- Transferring the crypto assets as-is
Gifting cash makes the received amount clear, but the giver may realize a taxable gain in the process. Transferring crypto assets as-is allows the recipient to keep holding the asset without conversion, but it requires care around transfer errors and confirming the fair market value.
Handing over an entire wallet is another option that some people consider, but because it tends to leave the identity of the manager and the timing of the gift ambiguous, it needs to be judged carefully. This section organizes the main ways of gifting crypto assets to family members.
Selling Crypto Assets and Gifting the Cash
One straightforward way to give crypto assets to family members is to first sell the crypto assets, convert them into cash, and then gift the cash. For example, this would cover a case where you sell part of your Bitcoin holdings and transfer ¥1,000,000 into your child's bank account.
In this case, the property received by the child can simply be treated as ¥1,000,000 in cash. Because it is cash, the recipient can easily grasp the amount received and keep a record of the gift. However, if the giver realizes a gain at the time the crypto assets are sold, that gain may be subject to income tax and resident tax.
Profits arising from the sale or use of crypto assets are, in principle, classified as miscellaneous income and require an income tax return, except where they arise incidental to an act that gives rise to business income or other categories of income.
Source: Tax Treatment and Calculation of Crypto Assets | National Tax Agency
For example, consider a case where crypto assets purchased for ¥500,000 are sold for ¥1,500,000, and ¥1,000,000 of that is gifted to a child. In this case, the amount gifted to the child is ¥1,000,000, but on the parent's side, tax may arise on the gain realized from selling the crypto assets.
So while gifting cash is straightforward for the recipient, it also requires checking the giver's taxable gain. Without organizing the purchase price, sale price, quantity sold, and fees involved, it may become impossible to calculate the taxable income correctly.
Sending Crypto Assets Directly to a Family Member
Another option is to send crypto assets, without selling them, directly to a family member's exchange (order-book exchange) account or self-custody wallet. For example, this would cover a case where a parent sends Ethereum they hold to their child's account at a Crypto Asset Exchange Service Provider. In this case, the crypto asset itself is considered to have been gifted to the family member.
This method does not involve a sale, so it is convenient when you want the crypto assets to remain held as crypto assets. On the other hand, the value of the gift needs to be assessed in Japanese yen. The NTA explains that when an individual transfers crypto assets through a gift, the value of the crypto assets at the time of the gift — that is, the fair market value — must be included in gross income for income tax calculation purposes (source: Tax Treatment of Crypto Assets).
This means that even if the crypto assets are not sold, they may still be treated for tax purposes as having been transferred at fair market value. In other words, it is not accurate to say that "since nothing was sold, the giver has no tax to worry about."
For example, consider a case where crypto assets purchased for ¥300,000 are gifted to a child when their fair market value is ¥1,000,000. In this case, the recipient is treated as having received a gift worth ¥1,000,000. Meanwhile, the giver may also need to calculate taxable income based on the ¥1,000,000 fair market value.
This is a less intuitive point than a straightforward cash gift. When gifting crypto assets to family members, it is necessary to check not only gift tax but also the giver's own income tax. If the amount is large, or if the crypto assets being gifted carry a significant unrealized gain, it is advisable to consult a tax accountant.
Also worth noting: if you make a mistake with the destination address, you may not be able to recover the crypto assets. This is unlike a bank transfer, where the recipient's name can be checked and the transfer reversed. Before sending, you need to confirm the asset, the network, the destination address, and whether a tag or memo is required.
Handing Over an Entire Wallet Should Be Judged Carefully
Some people may consider handing over an entire wallet as a way to pass crypto assets to family. For example, this would cover a case where you give a family member the login details or recovery phrase for a wallet app, and let them manage the crypto assets within that wallet.
However, this approach needs to be judged carefully. Handing over an entire wallet can make it unclear who was managing the assets and when. In addition, sharing a recovery phrase or private key raises the risk of losing the assets if that information leaks to a third party.
In a self-custody crypto wallet, the recovery phrase or private key (signature key) is the means of accessing the assets. Anyone who knows this information may be able to move the assets held in the wallet, so sharing it carelessly — even within a family — can leave management responsibility unclear.
When gifting crypto assets to family members, it is best to keep a transfer record wherever possible and make the date and quantity of the gift clear, so the assets are easier to manage. Because handing over an entire wallet tends to leave both the tax explanation and the asset management unclear, it is safer to check with a professional beforehand.
Which Price Should Be Used to Determine the Gift Amount?
When gifting crypto assets to family members, it is necessary to check not only the quantity but also the amount converted into Japanese yen. Because gift tax is calculated in Japanese yen, a record that simply says "1 BTC was given" or "10 ETH was gifted" is not enough to determine the value of the gift.
For this reason, when determining the gift amount, it is important to decide which point in time's price to use, and what kind of records to keep so the value can be verified later. This section explains how to think about valuing a gift in Japanese yen, and why it is necessary to keep records of exchange prices and transfer history.
Value the Gift in Japanese Yen Based on the Market Price on the Day of the Gift
When crypto assets are gifted to a family member, the value of the gift needs to be assessed in Japanese yen.
The NTA explains that, for valuing crypto assets acquired through inheritance or gift, crypto assets with an active market are valued based on the transaction price published, as of the taxable event date, by the Crypto Asset Exchange Service Provider through which the taxpayer conducts transactions (source: Tax Treatment of Crypto Assets).
For example, if 1 ETH is gifted to a family member, and the price on that day is ¥300,000, it should be treated as a ¥300,000 gift; if the price is ¥500,000, it should be treated as a ¥500,000 gift. Even for the same quantity, the assessed value changes depending on when the gift is made.
For this reason, when gifting crypto assets, it is important to clearly record the date of the gift. For highly volatile assets, the assessed value can change significantly over just a few days.
Keep Records of Exchange Prices and Transfer History
When crypto assets are gifted to a family member, it is necessary to keep records so that the gift can be explained later if needed. At minimum, it is a good idea to organize the following: the date of the gift, the asset, the quantity, the amount converted into Japanese yen, the exchange used to check the price, the destination, and the transfer history.
If the transfer was made through an exchange, it is often possible to download the transfer history or transaction history. Even if the transfer was made from a self-custody wallet, keeping a record of the transaction ID makes it possible to verify the transfer history on the blockchain.
It is also a good idea to save the price screen or transaction history from the Crypto Asset Exchange Service Provider you use at the time of the gift, so it can be checked later. A screenshot alone may sometimes not be sufficient, so where possible it is safer to also keep the exchange's historical data or statements.
With crypto asset gifts, what matters is being able to explain not just "that a transfer was made," but also "how much it was worth at that point in time." This is especially important because gifts between family members are often handled verbally, and without records, the amount and timing can become unclear later.
Points to Watch for When Gifting Crypto Assets to Family Members
When gifting crypto assets to family members, attention is needed not only to taxes but also to how the assets are managed afterward. Unlike a bank deposit, which can always be confirmed by contacting the financial institution, crypto assets may become inaccessible even to the account holder or their family, depending on how the account or wallet is managed.
In particular, when a family member is not familiar with handling crypto assets, it is important to think through the management approach after the transfer, how the private key or recovery phrase will be stored, and how to keep a record showing that the gift took place. This section explains the management-related points to check when gifting crypto assets to family members.
The Family Member Needs to Understand How to Manage the Crypto Assets
When gifting crypto assets to family members, it is necessary to check whether the recipient understands how to manage them. This is because crypto assets are managed differently from assets held in a bank deposit or brokerage account.
If the assets are held on an exchange, the recipient needs to understand login credentials, two-factor authentication, withdrawal limits, and identity verification. If the assets are held in a self-custody wallet, the recipient must understand the importance of the private key (signature key) and recovery phrase.
For example, a family member who is not used to managing crypto assets may end up saving their recovery phrase in a smartphone notes app or in the cloud. However, this kind of storage method carries a risk of unauthorized access or data leakage, so it must be avoided.
Even if the giver is knowledgeable about crypto assets, if the recipient is unable to manage them properly, the risk of loss or unauthorized transfer increases. Before gifting to a family member, it is important to confirm which account or wallet will be used for management, and how the login credentials and authentication method will be stored.
Sharing a Private Key or Recovery Phrase Requires Particular Care
When using a self-custody wallet, particular care is needed around how the private key (signature key) or recovery phrase is handled. These are the critical pieces of information used to access the crypto assets in the wallet.
A recovery phrase is a combination of multiple words used to restore a wallet. If a smartphone is lost, or a wallet app becomes unusable, having the recovery phrase makes it possible to restore the assets in a different wallet.
On the other hand, if a third party learns the recovery phrase, there is a danger that the crypto assets in the wallet could be moved out. Even when sharing it with family, it is important to clearly decide whether it will be kept on paper, engraved on a metal plate, and who will manage it and where.
Also, sharing only the wallet app's login password does not necessarily mean the assets can be safely passed on. If the app becomes unusable, or the device is lost, it may be impossible to restore the assets without the recovery phrase or private key.
When gifting crypto assets to family members, it matters not only how taxes are handled but also how the information needed to access the assets is managed. In particular, when gifting a large amount of crypto assets, avoid casually sending the recovery phrase over a messaging app or email.
Keep a Gift Agreement and Records
Even when gifting crypto assets between family members, keeping a gift agreement and records makes it easier to explain the gift later. A gift is established when the giver expresses the intent to "give" and the recipient accepts by agreeing to "receive."
A gift can be established verbally, but if a tax review becomes necessary later, it can be difficult to explain based on a verbal agreement alone. Because crypto asset prices are highly volatile in particular, it is important to clearly record when the gift was made, which asset, and how much.
A gift agreement can be organized to include the date of the gift, the giver, the recipient, the crypto asset, the quantity, the amount converted into Japanese yen, the destination, and the intent to gift. Alongside this, it is also useful to keep records of the transfer history and the price at the time.
Between family members, it can be tempting to think "it's fine, we're parent and child" and skip keeping records. However, for tax purposes, transfers of property may still be reviewed even between family members. Because a gift tax return may be required, keeping records is important.
Summary
When crypto assets are gifted to family members, the recipient may be liable for gift tax. There is an annual basic exemption of ¥1.1 million, but it is necessary to judge this not just based on crypto assets alone, but by including any cash or other property received in the same year.
Taxes may also be relevant on the giver's side. If crypto assets are sold and converted into cash, income tax and resident tax may apply to the resulting capital gain; even if the crypto assets are gifted as-is, income tax may need to be calculated based on the fair market value at the time of the gift.
Care is also needed around asset management when gifting crypto assets. If the family member does not understand how to use a wallet or exchange, there is a risk of transfer errors or loss of access. When sharing a private key or recovery phrase, the storage method needs to be decided carefully as well.
When gifting crypto assets to family members, it is important to think through taxes, records, and wallet management separately. If the amount is large, or if the crypto assets being gifted carry a significant unrealized gain, it is a good idea to consult a professional such as a tax accountant beforehand.
This article is for informational purposes only and does not constitute financial or investment advice. Please consult a qualified professional before making investment decisions.
