The Property (Digital Assets etc) Bill (‘the Bill’) was introduced by the UK government into the House of Lords in September 2024 with the aim of clarifying the concept of ‘digital assets’ as personal property in England and Wales. The Bill has since passed second reading and in February 2025, was amended by a special public bill committee to expand the scope of jurisdiction to include Northern Ireland.
The progression of the Bill follows specific statutory law reform outlined in a report conducted by the Law Commission in 2023, which emphasised and outlined the need for, and barriers against, the legislation and legal sector being able to keep pace with the ever growing and complex area of digital assets.
What are digital assets?
The term itself is very broad and has the potential to encompass a wide range of assets from email accounts and passwords to digital art to cryptocurrencies such as bitcoin and non-fungible tokens (NFTs). However, case law illustrates that each asset must be considered on its own merits.
The Bill itself.
The Property (Digital Assets etc) Bill reads:
‘Objects of personal property rights
A thing (including a thing that is digital or electronic in nature) is not prevented from being the object of personal property rights merely because it is neither—
- a) a thing in possession, nor
b) a thing in action.’
In law, personal property is divided into two categories: a “thing in possession” which is a tangible, physical asset, or a “thing in action” which is an intangible right such a debt. The language of the Bill is significant because it is seeking to create a new category so that a ‘thing’ is not precluded from being the object of personal property rights if it is not a ‘thing in possession or thing in action’. The Bill also importantly does not imply that ‘things’ must be ‘digital things’, rather it allows a wide definition to be adopted if appropriate, emphasising the Law Commission’s desire for the legal framework in England, Wales and Northern Ireland to remain flexible and adaptable, equipped to react to the everchanging nature of the global tech industry.
The impact of the Bill on individuals
- Inclusion of Digital Assets in Estate planning: individuals must now consider the most efficient way of including and distributing digital assets as part of their wider estate. This could include the process of identification; valuation and transferring such assets.
- Record keeping of Digital Assets: individuals should keep a comprehensive ‘inventory’ of digital assets to include account information, accessibility information and restrictions and consider how this information should be passed to the control of personal representatives following death.
- Trusts and Digital Assets: considering various trust structures to best manage, transfer and shelter digital assets, ensuring they continue to operate or are transferred in accordance with the individual’s wishes.
- Tax implications: understanding how digital assets are valued and ultimately taxed based on the individual holding.
Although the UK has been hailed for its progress as “one of the first countries to recognise digital assets as personal property in law” the integration of such changes into our legal framework will still take time. The Bill will have to pass through various Parliamentary stages, and as it does so we will continue to monitor and track its progress. It does however mark a pivotal step for the UK’s legal sector, providing clarity and security for owners of digital assets, once again illustrating the importance of continually seeking professional and personalised estate planning advice.
For legal guidance and advice regarding estate planning, please contact Fiona Kirkpatrick or Anna Thompson in our Private Client team for more information.
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.
