Does a UK company holding only bitcoin still need Form 5471?

Yes, if a US person controls it or is a US shareholder of it as a controlled foreign corporation. The filing duty follows ownership, not the company's assets. A dormant-looking company that only holds bitcoin still has a balance sheet to report in US dollars on Schedule F, and any disposal during the year has to be tested as subpart F income on Schedule I.

Is the company's gain on selling crypto taxed to me in the US even if it pays no dividend?

Generally yes. Gain on property that gives rise to no income is foreign personal holding company income under section 954(c)(1)(B) unless an exception such as the de minimis rule or the high-tax exception applies. A US shareholder of a controlled foreign corporation includes their share in the same year as ordinary income, and later distributions of that amount are tracked as previously taxed earnings.

How does HMRC tax a UK company on crypto gains?

HMRC's Cryptoassets Manual says a company must take all its exchange token transactions into account for corporation tax. Where the tokens are held as an investment, a disposal is typically the disposal of a capital asset and the gain is charged to corporation tax as a chargeable gain. If the activity amounts to a trade, trading income rules apply instead. HMRC does not treat exchange tokens as money.

Do I report my UK company's crypto exchange account on my FBAR?

FinCEN Notice 2020-2 says a foreign account holding virtual currency is not currently reportable on the FBAR unless it holds reportable assets besides virtual currency, and that FinCEN intends to propose a rule change. An owner with more than 50 percent of the company has a financial interest in the company's accounts, so an exchange account that also holds cash is one we report.

Are the company's wallets reported on my Form 8938?

Not directly. The IRS comparison of Form 8938 and the FBAR states that interests held indirectly through an entity are not reported on Form 8938. What an individual owner reports is the shareholding in the UK company itself, which is foreign stock not held in a financial account, once total specified foreign financial assets exceed the threshold for their filing status and country of residence.

Does a fall in the bitcoin price reduce the company's US income for the year?

No. Digital assets are property for US tax purposes, so gain or loss arises only on a sale, exchange or other disposal. An impairment charge in the UK accounts under FRS 102 is an accounting entry and is adjusted out when computing earnings and profits on Schedule H. Year-end value affects the Schedule F balance sheet in dollars, not the subpart F inclusion.

Form 5471 for a UK Company Holding Crypto Assets

Form 5471 is the annual US information return a US citizen files for a UK limited company they control, and when that company holds bitcoin or other cryptoassets the form has to show those holdings in US dollars and the gain on any disposal as income that is, in most cases, taxed to the owner in the same year. The short answer is this: the IRS treats digital assets as property, a gain the company makes on selling property that produces no income is generally foreign personal holding company income under subpart F, and the US shareholder includes their share of it on their own return whether or not the company pays anything out. The UK charges corporation tax on the same gain under its own rules, and the two calculations rarely match.

Official guidance aimed squarely at a foreign company with crypto on its balance sheet is thin. In this article we separate what the IRS, FinCEN and HMRC have actually published from the positions we take when preparing these returns, and we say which is which.

Does a UK company holding crypto change who files Form 5471?

No. The filing obligation comes from ownership and control of the foreign corporation, not from what the corporation owns. The IRS instructions at https://www.irs.gov/instructions/i5471 describe a Category 4 filer as a US person who had control of a foreign corporation, and a Category 5 filer as, broadly, a US shareholder of a controlled foreign corporation (CFC). A US citizen living in the UK who owns all the shares of a UK limited company meets both descriptions. A sole owner who meets both Category 4 and Category 5a checks only Category 4, and files the full form with its separate schedules.

What the crypto changes is the content of the schedules: an asset that the UK accounts, the UK corporation tax computation and the US schedules each measure differently, and disposals that land in a specific line of the subpart F worksheet. The same instructions state that a penalty of $10,000 is imposed for each annual accounting period of each foreign corporation where the required information is not furnished, with further penalties after IRS notice.

How does the IRS treat crypto held by a foreign company?

A digital asset is property for US tax purposes, not currency. The IRS says so in plain terms at https://www.irs.gov/filing/digital-assets, which defines a digital asset as any digital representation of value recorded on a cryptographically secured, distributed ledger, and applies the general tax principles for property transactions first set out in Notice 2014-21 (published at https://www.irs.gov/pub/irs-drop/n-14-21.pdf). The same page states that the basis of a digital asset is generally its cost in US dollars and that taxpayers must maintain sufficient records to support the positions taken on their returns.

That guidance is written for US taxpayers reporting their own transactions. Nothing on that page addresses a foreign corporation directly. The position we take in preparation is that the same property characterisation applies when the holder is a CFC, because the US rules for computing a CFC's income and earnings start from the rules that would apply to a domestic corporation. We flag it as an inference from general principles, not a quotation. It means every disposal by the company is a realisation event for US purposes: a sale for sterling, a swap of bitcoin for ether, or using crypto to pay a supplier.

Are the company's crypto gains subpart F income on Form 5471?

Generally yes, where the crypto is held as an investment or treasury reserve. Foreign personal holding company income is the passive income category of subpart F. Under section 954(c)(1)(B) of the Internal Revenue Code it includes the excess of gains over losses from the sale or exchange of property in three groups, the third of which is property which does not give rise to any income. Bitcoin held in a wallet pays no dividend, interest, rent or royalty, so in the returns we prepare a gain on its disposal is treated as falling in that third group. The Form 5471 instructions reflect the same structure: Worksheet A, line 1f, asks for the excess of gains over losses from certain property transactions, including property producing no income, and the result flows to Schedule I.

There is no IRS ruling we can point to that applies section 954(c)(1)(B) to bitcoin by name, and some practitioners analyse cryptoassets under the separate commodities category of the same subsection. For an investment holding both routes arrive at passive subpart F income, so the choice matters mainly for the exceptions.

The exceptions and limits that we test on every file are these:

Inventory property. The statute excludes from this category gains and losses on property that, in the hands of the CFC, is stock in trade or held primarily for sale to customers in the ordinary course of business. A company holding bitcoin as a reserve is not a dealer.
The de minimis rule. Where a company's passive-type income is small in relation to its total gross income, a statutory de minimis rule can remove it from subpart F for the year. A trading company with a modest crypto disposal alongside substantial trading revenue may fall within it.
The high-tax exception. Worksheet A carries a line for amounts excluded under the high-tax exception of section 954(b)(4), and Schedule G asks about it. It can apply where the item of income has borne foreign tax at a sufficiently high effective rate measured against the US corporate rate.
The earnings and profits limit. Subpart F income for a year cannot exceed the company's current earnings and profits, so a loss elsewhere in the company can reduce the inclusion.
Losses. The category is a net figure, the excess of gains over losses, so disposals at a loss in the same year offset gains within it.

What does a subpart F inclusion mean for the US shareholder?

A subpart F inclusion is an amount of the company's income that the US shareholder reports on their own return for the year, in proportion to their shareholding, even though the company has distributed nothing. For an individual it is ordinary income. It is not a capital gain at preferential rates, even though the underlying item was a gain on an investment asset. Had the owner held the same bitcoin personally for long enough, the US would have taxed the gain as long-term capital gain.

The inclusion creates previously taxed earnings and profits, tracked on Schedules J and P, so that a later dividend of the same money is not taxed again in the US as a dividend. It also increases the owner's basis in the shares.

How are staking and similar rewards received by the company treated?

The IRS lists mining, staking and similar activities among the ways digital assets are received and states that income from digital assets is taxable. Its guidance index on the digital assets page includes a revenue ruling on the taxability of staking income, Rev. Rul. 2023-14. That ruling is directed at US taxpayers receiving rewards themselves.

For a CFC the published guidance stops there. The position we take in preparation, and it is a position, not a rule we can cite, is that rewards are income of the company when it obtains control over them, measured at their value at that time, and that value becomes the basis of the units received. Rewards earned by simply delegating a holding look passive to us and we report them as subpart F income; a company running validation as a genuine operating business has an argument for active treatment that must be documented before the return is filed. HMRC covers staking by businesses at CRYPTO40250 in the manual, and the business section index is at https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto40000 for reference.

Where does crypto go on Schedule F, Schedule C and Schedule H?

Schedule F is the balance sheet of the foreign corporation, and the instructions say to report all information in US dollars. It is generally prepared in the functional currency and translated under US GAAP translation rules. Schedule C, the income statement, is reported in the corporation's functional currency in accordance with US GAAP, with a US dollar column. Schedule H then adjusts book income to current earnings and profits under US tax principles.

The UK accounts are the starting point, and they do not follow US GAAP. UK small-company accounts prepared under FRS 102 have no standard written for cryptoassets. In general terms, a holding that is not stock held for sale in the ordinary course of business is accounted for as an intangible asset, usually at cost less impairment, with a revaluation approach available in some circumstances. That is a general description of practice, not a quotation from the standard.

The Form 5471 balance sheet has no line labelled for digital assets. In the returns we prepare, crypto held as an investment is shown within the intangible or other asset lines with a supporting statement describing what it is, how many units and how it was measured, and we keep the classification the same from year to year. Three sets of numbers then have to be reconciled:

The UK statutory accounts figure, in sterling, on the company's FRS 102 policy.
The Schedule F figure, in dollars, on a US GAAP basis. US GAAP has its own measurement rules for crypto assets, which may differ from a UK cost-less-impairment figure, so the two balance sheets can legitimately show different amounts for the same coins.
The tax basis figure used for Schedule H and the subpart F worksheet, which ignores unrealised movements altogether. An impairment charge or a revaluation uplift in the accounts is not a realised loss or gain for US tax purposes and is adjusted out on Schedule H.

The failure mode we see most often is a Schedule H that simply copies book profit, so that an accounting impairment reduces earnings and profits when nothing was sold.

How do you value year-end crypto holdings in dollars?

This is one of the gaps in the published material. The Form 5471 instructions tell you to report Schedule F in US dollars and to translate under US GAAP principles; they do not prescribe a price source or a time of day for an asset that trades continuously across many venues. The approach we take, stated as our practice, is to fix a written valuation policy and apply it without exception: one identified price source, one cut-off time on the last day of the company's accounting period, and one exchange rate source for sterling to dollars.

Year-end value matters for the balance sheet and for the owner's own asset reporting. It does not create income: a holding that has doubled in value and not been sold has produced no gain, and one that has halved has produced no loss.

How does UK corporation tax apply to the company's crypto gains?

HMRC's Cryptoassets Manual covers companies in its business section. The corporation tax introduction at https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto41050 says that companies must take into account all of the exchange token transactions they have carried out, and that where the activity is the disposal of a capital asset any gain would typically be charged to corporation tax as a chargeable gain. The same page explains that the corporation tax rules written for money and foreign currency do not apply to exchange tokens, and it directs readers to consider the loan relationship and intangible fixed asset rules and, where the company is trading in tokens, the trading income rules.

So the UK looks first at what the company is doing. An investment holding normally produces chargeable gains computed in sterling under the UK matching and pooling rules for companies; a trade in tokens produces trading profits instead. The US calculation does not use the UK pool. The same disposal can therefore show one gain in the corporation tax computation and a different gain on the subpart F worksheet, before any exchange rate effect.

Can UK corporation tax be credited against the US inclusion?

In outline, there are three routes, and none is automatic. First, the high-tax exception can remove the item from subpart F altogether if the UK tax on it, measured against US-computed income, is high enough; because the UK and US gains differ, a UK rate that looks sufficient on paper may not pass. Second, an individual shareholder does not ordinarily receive a credit for tax the company paid, but can elect under section 962 to be taxed on the inclusion as if they were a domestic corporation, which opens access to that credit at the cost of a different treatment of later distributions. Third, UK tax the individual pays personally on salary or dividends from the company is creditable against their own US tax under the ordinary rules. The company's foreign taxes are reported on Schedule E of Form 5471.

Could the company be a PFIC as well as a CFC?

A company whose income is mostly passive, or whose assets mostly produce passive income or none, can meet the definition of a passive foreign investment company, and a pure crypto holding company is an obvious candidate. For a US shareholder who owns 10% or more of a CFC, an overlap rule in section 1297(d) generally means the company is not treated as a PFIC with respect to that shareholder for the period in which it is a CFC and they are a US shareholder. The overlap rule does not protect a US family member or co-investor holding less than 10%, who may have a PFIC interest and separate reporting in the same company. We describe this rule in general terms and check its conditions on each file.

Are the company's exchange accounts reportable on the owner's FBAR and Form 8938?

The two reports work differently, so take them one at a time. The IRS comparison at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements states that for the FBAR a person has a reportable interest in an account held indirectly through an entity if they have a sufficient ownership interest, meaning a greater than 50 percent interest in the entity. A majority owner of a UK company therefore reports the company's UK bank accounts on their own FBAR where the aggregate value of their foreign financial accounts exceeds $10,000 at any time in the calendar year.

For accounts that hold crypto, FinCEN Notice 2020-2, published at https://www.fincen.gov/system/files/shared/Notice-Virtual%20Currency%20Reporting%20on%20the%20FBAR%20123020.pdf, states that the FBAR regulations do not currently define a foreign account holding virtual currency as a type of reportable account, so at this time such an account is not reportable on the FBAR unless it is a reportable account because it holds reportable assets besides virtual currency. The notice also says FinCEN intends to propose amending the regulations to include virtual currency as a type of reportable account. That remained the wording of the notice on fincen.gov when we checked it on 9 October 2026. We recheck before every filing season.

The exception in the notice is the part that catches companies. An exchange account that also holds a sterling, euro or dollar cash balance is, in our reading, an account holding something besides virtual currency, and in the returns we prepare we report it.

Form 8938 runs the other way. The IRS comparison says indirect interests through an entity are not reported on Form 8938, so the company's exchange accounts are not the individual owner's specified foreign financial assets. The shares in the UK company are: foreign stock not held in a financial account is reportable on Form 8938 once the owner's total specified foreign financial assets exceed the threshold for their filing status and residence. For an unmarried taxpayer living outside the United States the IRS gives that threshold as more than $200,000 on the last day of the tax year or more than $300,000 at any time during it.

What happens when you move personally held crypto into the company?

This is the second gap in the published material. Owners often assume that transferring their own bitcoin to their own company is a non-event. For US purposes a transfer of appreciated property by a US person to a foreign corporation is an outbound transfer. The domestic rule that lets a shareholder contribute property to a controlled corporation without recognising gain is overridden for many outbound transfers, so the built-in gain can be taxable to the individual at the moment of transfer. The transfer is also separately reportable; the IRS form for a US transferor of property to a foreign corporation is Form 926, described at https://www.irs.gov/forms-pubs/about-form-926 on the IRS site. We describe these rules qualitatively because the outcome depends on what is transferred, what is received in exchange and whether any exception applies.

On the UK side a transfer by an individual to a company they control is a disposal by the individual for capital gains tax, generally measured at market value because the parties are connected. Either way the individual needs their own lot-by-lot basis records to compute the gain, and the company needs a clean opening cost.

Worked illustration: a consultancy company with a bitcoin reserve

The following is an illustration only. The figures are invented, the exchange rate is an assumption and no tax rate is implied. A US citizen living in London owns 100% of a UK limited company with a 31 December year end. Some years ago the company used surplus cash to buy 10 bitcoin for a total of £200,000. During the current year it sells 4 of them for £160,000 to fund an office fit-out.

On the US side, using specific identification with records showing the 4 units sold cost £80,000, the gain is £80,000. Assume an average exchange rate for the year of $1.25 to £1. The gain translates to $100,000. It is a gain on property that gives rise to no income, so it enters Worksheet A as foreign personal holding company income. Assume it is too large relative to the company's gross income for the de minimis rule, that current earnings and profits exceed it, and that the high-tax exception is not met or not elected. The owner includes $100,000 on their Form 1040 as ordinary income for the year, although the company paid them nothing from the sale. Previously taxed earnings of $100,000 are recorded on Schedules J and P.

On the UK side the company computes a chargeable gain in sterling under UK rules, which may not equal £80,000 if the UK pool cost differs from the cost of the units identified for US purposes. The remaining 6 bitcoin appear on Schedule F in dollars under the valuation policy, and no further US income arises until they are sold.

What records does the company need for basis, lot by lot?

The IRS states that basis is generally cost in US dollars and that records must support the return. Its digital assets page also points to Rev. Proc. 2024-28, which deals with allocating unused basis to the digital assets held within each wallet or account as of 1 January 2025. That procedure was written for US taxpayers; the position we take is that a CFC's US computations should be able to meet the same standard, because a per-wallet record is the only kind that survives an IRS question. For each acquisition and disposal we ask the company for:

The date and time, the number of units and the wallet or account in which they were held.
The price paid or received in the currency of the transaction, with fees shown separately.
The sterling and dollar equivalents and the rate source used.
The transaction identifier, so that internal transfers between the company's own wallets are not mistaken for disposals.
For rewards, the value on the date the company obtained control, which becomes the basis of those units.
The method used to identify which units were sold, applied consistently and documented at the time of the sale.

Before the next return, an owner in this position should have a reconciled unit count for every wallet and account, a US basis schedule separate from the UK pool, a written year-end valuation policy, and an FBAR list that includes any exchange account holding cash. The IRS keeps the current form and schedules at https://www.irs.gov/forms-pubs/about-form-5471 for reference. Our role is tax preparation and compliance: we compute the numbers both ways, file the forms and keep the schedules that prove them.