Digital Assets and Succession: Understanding the Property (Digital Assets etc) Act 2025
- helenhall5
- 16 hours ago
- 4 min read
Rosamund Evans, Senior Lecturer at NLS https://www.ntu.ac.uk/staff-profiles/law/rosamund-evans
The Property (Digital Assets etc) Act came into force on 2nd December 2025. The Act expands the framework of the law of personal property in England and Wales. It confirms digital assets may carry property rights and are separate from other forms of personalty. This is the first time the status of digital and electronically held assets has been officially recognised in legislation in England and Wales.
What does the Act do?
The Property (Digital Assets etc) Act 2025 confirms that digital assets and those held purely by electronic means are capable of falling under what is effectively a new third category of personal property. It does not confirm or attempt to define the status of particular types of digital assets, instead leaving it open to the common law to determine which specific digital asset types carry or do not carry property rights.
Previously there were only two recognised categories of personal property – chose in possession and chose in action. Chose in possession (rights in things in possession) are physical, tangible things. Chose in action (rights in things in action) are intangible things that carry legally enforceable rights. Digital assets do not fall easily into either category.
Law Commission Report
A Law Commission report published on 27 June 2023 recommended statutory confirmation that a thing is not to be deprived of legal status as personal property merely because it does not fall within the traditionally recognised forms of personalty. The result is statutory recognition of a third category of personal property for forms of assets that can only exist in a digital or electronic form, such as cryptocurrencies, non-fungible tokens etc. The recommendation was made on the basis that digital assets are ‘fundamentally different both from physical assets and from rights-based assets like debts and financial securities.’
Implications for Wills and Estate Administration
Although the Act is not focused specifically on succession rights it provides greater clarity in general terms for professionals involved in will drafting and for personal representatives administering the estates of deceased persons. The Act clarifies that digital assets can be passed on death through succession rights.
There remain however, many potential difficulties at a practical level in dealing with digital assets and items held electronically. Individuals need to carefully consider whether they can pass specific digital assets as an inheritance and precisely how that may be achieved.
Personal representatives (PRs) have a duty to collect and protect all the assets of the estate. It is important for PRs to be able to distinguish between those digital assets that fall within the newly recognised category and those that are merely licences or service agreements and attract no transferable value.
A further practical difficulty is accessibility. Under UK law it is an offence to access a person’s online account after their death, without authority. Legal title to a deceased person’s assets vests in their executors through their appointment in the deceased person’s will or through grant of representation to administrators on an intestacy. However, the authority to access online accounts will usually be required from the service provider. Some of the multi-national service providers such as Apple, Facebook, Google etc have been prompted by public pressure to put in place digital legacy options on their platforms but they generally require active engagement and therefore planning by the individual. It is not something that can simply be left to the person’s PRs to deal with under their general authority.
There are other potential difficulties for PRs in dealing with digital assets. Those people who have very active online and social media lives or who hold investments in cryptocurrencies may need to consider appointing specialist executors in their wills to deal exclusively with the administration of their digital assets, separate from their general executors; much in the same way that authors and business owners are advised to appoint separate executors and trustees to deal with literary or business assets in their estates.
The appointed digital executors are able to apply for a separate grant of probate, leaving the general executors to administer the other assets in the deceased’s estate. It may be particularly advantageous to have a separate grant of representation where it is anticipated that a person’s digital assets will have continuing value in the future in terms of income generation or increasing capital value. The confirmatory effect of the Property (Digital Assets etc) Act 2025 is likely to assist digital executors and trustees in managing digital estate assets and may lead to their appointment becoming more common.
Practical Challenges Ahead
From 1st January 2026 crypto asset service providers operating in the UK must report to HMRC information about the tax residency and transactions of their users. UK taxpayers who fail to give their personal details to service providers may be charged a penalty of up to £300 per user. More generally, HMRC has expressed concerns about non-compliance in reporting digital assets. HMRC regards some types of digital assets such as cryptocurrencies as forming part of a deceased person’s estate for valuation purposes. In future, the focus inevitably is likely to fall increasingly on PRs to report such assets, which means they must be able to identify and value them correctly. The previous absence of a statutory basis for property rights associated with digital assets presented difficulties for PRs and their advisers in correctly establishing ownership and valuations. The legislative confirmation that such assets are capable of attracting property rights should assist in that respect.
Digital assets are an increasingly important and complex area of everyday life, and the law is developing at a faster rate in consequence. The enactment of the Property (Digital Assets etc) Act 2025 marks a major change, bringing a level of certainty that previously the common law had failed to provide. There is, however, much that still needs to be worked out in terms of resolving practical issues surrounding the administration of digital assets on death.
Further Reading
Administration of Estates Act 1925, s 2 (duty of personal representatives to collect and administer estate assets)
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