If, after the failure of FTX, holders of cryptocurrencies or cryptoassets are immediately more concerned about the safety of their funds, the issue of transmission is gradually entering people’s minds. ” At the moment we don’t have many requests but in the last two years the number of customers who contact us to ask questions about the transmission of their cryptoassets has increased. “, testifies Cédric Pommier, notary in Albertville and president of a commission of the Congress of Notaries of France 2021 dedicated to digital heritage. According to a study by the European Central Bank (ECB) published in May 2022, 4 million French people (6%) own cryptocurrencies, these digital assets that are traded via a computer network called the blockchain.
Giving live: simplicity and security
” A cryptocurrency is considered an asset, even if it is digital. It is an object that is not palpable, but which has a patrimonial value such as a copyright or a patent. In terms of transmission therefore, cryptocurrencies are subject to the tax exemption rule and therefore to progressively scaled taxation. », defines Mathieu Fontaine, notary in Saint-Paul-Trois-Châteaux. An individual has the right to donate 100,000 euros to a child every 15 years without having to pay inheritance tax. Above this amount, donations are progressively taxed. ” For example, between 15,933 and 552,324 euros, a donation is taxed at 20% “says Cédric Pommier.
As far as tax law is concerned, it is preferable to bequeath your cryptocurrencies to your children before selling them since “ the donation will make it possible to “purge” the latent capital gain relating to the crypto contributed and only the donation rights would be due“, explains Frédéric Poilpré, member of the Cercle des Fiscalists. In other words, if the heirs received bitcoins, even if their donor had made a capital gain, the latter would not be accounted for or taxed by the tax authorities. If the heir subsequently resells the cryptocurrencies, having himself realized a capital gain, this will then be subject to the single flat-rate deduction of 30%.
If a cryptocurrency holder wishes to transfer his assets during his lifetime, notaries recommend doing so within their office. According to them, here’s how to do it: It is necessary for the heirs to open a cryptocurrency account or create a digital wallet. Then, on the day of the transfer, the donor and the beneficiaries determine, with the notary, the value of the wallet by comparing the price of the cryptoassets on different platforms, then averaging the different prices. This amount is then withheld in the deed by the notary, so the donor can transfer these assets from his account to those of his heirs » explains the notary of Albertville. Small drawback of this procedure, usufruct is impossible. In other words, a donor will not be able to pass on his cryptocurrencies and continue to control them, to buy and sell them as he pleases, pending his death.
If for classic cryptocurrencies the estimation and transmission are relatively simple, for NFTs (or non-fungible tokens, certificates of ownership registered on a blockchain) it is more complicated. ” We need to find a platform that can estimate the NFT and then the rights holders need to all agree on the price “, details Cédric Pommier who recalls” that there is however the same problem with classical works of art which are difficult to estimate. »
Post mortem donation: avoid losses or omissions
If a saver’s lifetime gift is low-risk and easy enough to make with the help of a notary, heirs may have a much harder time getting their hands on their donor’s crypto-assets if the donor doesn’t. not arrange his estate before his death.
- The case of reliance on a grant
In the event that a donor keeps their coins in exchange, the heirs can end up with two problems. The latter may not be aware of the account that has been opened by their donor. Traditionally, notaries can find their clients’ bank accounts by looking in the bank account file (Ficoba) and in the life insurance contract file (Ficovie) to look for life insurance opened in a French establishment. But to date, no file lists cryptocurrency accounts opened by French individuals. Be careful in communicating the name of the account to the heirs.
Once the account is found, it will not be easy. There may be obstacles if you cannot communicate with a platform or if it is based abroad and does not recognize the authority of the notary. The simplest thing therefore seems to be that the heirs know the codes that allow access to their donor’s account. “, advises Mathieu Fontaine.
An inheritance arranged after death also carries another risk. “ If there is no will, au death of the holder of the cryptocurrencies, these assets will be part of the co-ownership and will fall within the classic management rules of the co-ownership “, warns tax expert Frédéric Poilpré. Each heir will then receive an equal share of the portfolio, if found. Be careful though, the transfer of a cryptocurrency wallet from a donor to those of the heirs can be blocked if one of the latter refuses the transfer or does not come forward.
- The Case for Custody on a “Decentralized Wallet”
In case a donor has his cryptocurrencies on a “decentralized wallet”, which can take the form of a USB stick that allows cryptocurrencies to be sent and received, the succession must also be well prepared.
Indeed, if this wallet (or the recovery phrase that allows access to it) is not found by the heirs, they will have no way to get their hands on their donor’s cryptocurrencies. So how can you be sure you are passing on these items?
” The simplest way is for the donor to place a copy of the private key or recovery phrase in a safety deposit box at his home, at his bank, or to deliver this copy in a sealed envelope to his notary, performing what is called a mystic will recommends Cédric Pommier. The notary has the right to keep the medium (key or phrase allowing access to the wallet) because “secrecy and confidentiality are preserved as long as the envelope is sealed, we are sure that no one has been able to access the wallet “, justifies the notary of Albertville.
Once the death has occurred, the notary will only have to send the recovery key or phrase to the beneficiaries so that they can connect to their donor’s wallet and share the crypto-assets stored there. ” A mystical will is currently the best way to have security and guarantee on the transmission of one’s cryptocurrencies because the notary will keep the envelope in a safe and the customer will benefit from a notary guarantee in case of problems. “, believes Mathieu Fontaine. A solution that combines security and prevents you from suffering blockage or loss of your funds in the event of failure of your trading platform, such as the one just suffered by FTX. A solution which is not yet risk-free and which prompts notaries “to think of innovations which will make it possible to overcome all the transmission problems we encounter today”, concludes Mathieu Fontaine.