Gift-then-sell strategy for crypto-assets: how to wipe out unrealized capital gains in 2026

Maxime Ollagnier

06/24/2026

(06/23/2026)

It is estimated that over six and a half million French citizens now hold cryptocurrencies (ADAN x KPMG x IPSOS Study - 2024 Edition). For some of them, these assets represent a considerable share of their wealth - sometimes the majority.

The problem is that many do not dare convert their crypto into euros: every sale for consideration triggers a tax on the realized capital gain, and when you bought Bitcoin at €3,000 only to see it climb past €100,000, the tax bill can be steep.

This is where the gift-then-sell strategy comes into play. The concept is simple on paper: gift your crypto-assets to a family member (child, grandchild, spouse). This fully or partially wipes out the unrealized capital gain depending on the recipient's situation and their tax household, and the recipient can then convert them into euros with a potentially zero or significantly reduced capital gain.

⁠The gift of crypto-assets

Who can give what?

Gift to a spouse or civil partner (PACS)

First and foremost, the question of ownership of the crypto-assets must be addressed. In the case of a gift to a spouse or civil partner, this depends on the donor's matrimonial regime and when the cryptos were acquired (before or during the marriage/civil partnership). ⁠ ⁠

Community property

Separation of property

Cryptos acquired before the union

Cryptos are separate property of the spouse who already held them -Gift possible

They are separate property of the spouse who already held them - Gift possible

Cryptos acquired for consideration after the union

Cryptos are joint property even if purchased with only one spouse's salary - Gift must be regulated / spouse's consent required

They belong to the spouse who paid for them - Gift possible

Cryptos acquired without consideration after the union (inheritance, gift, ...)

Cryptos remain separate property of the recipient spouse - Gift possible

They remain separate property of the recipient spouse - Gift possible

⁠Two points often overlooked:

certain marriage contracts contain specific clauses that may restrict or regulate the gift of digital assets. It is best to check beforehand.
digital assets acquired for consideration during the marriage under the community property regime are in principle joint assets. A gift must therefore not be made unilaterally as if it were a separate asset: the spouse's consent and an analysis of the matrimonial regime are essential.

Gift to stepchildren from a previous relationship

In blended families, a gift to a stepchild must be analyzed with caution: in the absence of a legal parent-child relationship or adoption, the recipient does not benefit from the €100,000 allowance reserved for direct-line transfers. Depending on the exact situation, the tax treatment can therefore be highly unfavorable, with a risk of taxation at the rate applicable between unrelated parties. Simple adoption may, in certain cases, alter this framework, but it should be examined with a notary or a lawyer.

The valuation headache

How do you set the value of a gift when the asset can swing by 10% in a single day? Under tax law, it is the value on the day of the gift that serves as the basis for calculating duties. With cryptocurrency, suffice to say the window is wide.

Hence the advantage of converting to stablecoins (USDC, EURC) before making the gift. By converting volatile cryptos into stablecoins, you "lock in" the portfolio's value. And the good news: this crypto-to-crypto exchange is not taxable. Under French law, only conversion into fiat currency (euros) or the purchase of goods and services constitutes a taxable disposal within the meaning of Article 150 VH bis of the French Tax Code (CGI). The switch to stablecoins therefore remains tax-neutral.

Simple gift or gift-partition?

The distinction is critical, especially with assets as volatile as cryptocurrencies, because upon the donor's death, gifts made during their lifetime are brought back into the estate calculation to ensure equality among heirs.

Let us take an example. A father has two children, Anne and Bertrand. In 2025, he gives Anne cryptos worth €100,000. He gives Bertrand an apartment worth €100,000. Everything is fair at this stage. But upon the father's death in 2035, Anne's cryptos are now worth €500,000, while Bertrand's apartment is worth €150,000. With a simple gift, it is the value on the day of death that is used in the estate calculation: Anne will be deemed to have received €500,000, compared to €150,000 for Bertrand. She will have to compensate for this difference, even though she had received an identical amount at the outset.

The gift-partition avoids this problem: the value is locked in on the day of the deed, permanently. Anne and Bertrand each remain at €100,000, regardless of how prices evolve. This is the most suitable mechanism for crypto-assets, but it requires a notarized deed and at least two presumptive heirs.

⁠Tax treatment of the gift-then-sell strategy

Available allowances

Each parent can transfer up to €100,000 per child every 15 years free of gift tax. For a married couple under the community property regime with two children, this represents €400,000 in transfers fully exempt from duties, with the wiping out of capital gains as a bonus.

There are other allowances not to be overlooked:

€80,724 between spouses or civil partners (PACS),
€31,865 between grandparents and grandchildren,
and €5,310 between great-grandparents and great-grandchildren.

Finally, the "customary gift" (présent d'usage) should not be forgotten: a gift made on the occasion of a specific event (birthday, wedding, Christmas, passing an exam...) is not subject to gift tax, provided its value remains proportionate to the donor's wealth and income. No declaration is required. There is no fixed threshold: the tax authorities assess each case individually. A transfer of cryptos of a moderate amount on the occasion of a birthday may thus qualify as a customary gift, but caution is advised, as in the event of reclassification as a manual gift, gift tax becomes due.

Be aware that the €31,865 allowance (known as the "family gift of sums of money" or "Sarkozy gift") is subject to very strict rules that make it inapplicable to crypto-assets under the current state of French law.

Beyond these allowances, the excess is subject to the progressive gift tax scale, with rates ranging from 5% to 45% for direct-line transfers depending on the taxable amount. The full breakdown of brackets and calculation methods can be found on the official tax authority website ⁠

How does the capital gains purge work?

The principle is rooted in Article 150 VH bis of the French Tax Code (CGI): only disposals for consideration of digital assets are taxable. A gift, being gratuitous by nature, is therefore not a taxable event. It is this change in the tax acquisition price, and not the gift itself, that produces the purge effect.

In practice, here is what happens: the recipient receives the cryptocurrencies and integrates them into their tax portfolio at the value declared at the time of the gift. If they sell them immediately at the same price, their capital gain is zero. That is the purge.

The purge can be total when the recipient belongs to a separate tax household (adult child not attached to the parents' household, sibling, nephew...) and does not already hold digital assets. The recipient acquires the cryptos at their value on the day of the gift and can convert them into euros with no taxable capital gain.

However, if the recipient has their own tax household and already holds cryptocurrencies in their portfolio at the time of the gift, the purge is diluted. The crypto-assets received by way of gift are aggregated with their existing portfolio, and upon disposal, the formula under Article 150 VH bis of the CGI takes into account the total acquisition price and the overall value of the entire portfolio. A residual capital gain may therefore arise despite the gift.

When the recipient remains within the donor's tax household (spouse, civil partner, minor child or child still attached to the household), it is a different story altogether. Capital gains on digital assets are assessed at the level of the tax household as a whole, not per individual. The smoothing mechanism then reduces the purge effect, and a residual capital gain - sometimes a significant one - may persist.

⁠Worked examples

The formula for calculating the taxable capital gain on digital assets is as follows:

Taxable capital gain = Sale price - Total acquisition price × (Sale price / Overall portfolio value)

Case 1 - Full purge (separate tax household)

Mr. and Mrs. Dupont invested €40,000 in crypto-assets. Their portfolio is worth €500,000 in 2026. They give €200,000 in stablecoins to their daughter Julie, aged 25, who has her own tax household and does not hold any cryptos.

Each parent gives €100,000, exactly the amount of the direct-line allowance: no gift tax is due.

Julie converts into euros: her acquisition price is €200,000, her sale price is also €200,000. Capital gain = €0. No tax for Julie.

Case 2 - Diluted purge (minor child, same tax household)

Beware, this second case illustrates a common trap: when the recipient belongs to the same tax household as the donor, the purge is far from total.

Mr. Martin invested €50,000 since 2017, portfolio at €700,000 in 2022. He gives €100,000 in cryptos to his minor son, no gift tax due thanks to the allowances, but an immediate conversion into euros generates a capital gains tax because the tax household as a whole must be taken into account.

At the household level:

The gift increases the son's acquisition price by €100,000
It reduces the parents' acquisition price by €50,000 × (100,000 / 700,000) = €7,143
The overall acquisition price of the household is therefore €100,000 + €50,000 - €7,143 = €142,857
The overall portfolio value remains €700,000
Capital gain = €100,000 - €142,857 × (100,000 / 700,000) = €100,000 - €20,408 = €79,592, i.e. approximately €24,992 in tax at the flat-rate levy (PFU) of 31.4%.

For comparison, had Mr. Martin directly converted his €100,000 without making a gift, the capital gain would have been €92,857, i.e. €29,157 in tax. The saving achieved through the gift is therefore only €4,165, which confirms that the purge is very largely diluted when the recipient remains within the same tax household.

Cryptocurrency tax declaration for individuals: practical guide, explanations and recommendations for properly preparing it

Obligations not to be forgotten

Form 2735: any gift of crypto-assets by way of manual gift must be declared using Cerfa form no. 2735, within one month of the gift being disclosed. Without this form, no allowance applies, and the 15-year clock does not start running.

Digital asset account declaration (3916-bis): the recipient must declare each year all accounts held on exchange platforms using Cerfa form no. 3916-bis. For minor children, the parents are responsible for this.

Penalties for non-compliance:

€750 fine per undeclared account (€1,500 if the total value exceeds €50,000).
As for an undeclared gift, it exposes the donor to penalties and the loss of allowances - the exact opposite of the intended objective.

Beware of the risk of abuse of rights

The tax authorities are not naive. If they consider that the gift had no other purpose than to evade tax, they can reclassify the transaction as an abuse of rights. To avoid this risk, three conditions are essential:

The donor must have genuinely and irrevocably divested themselves of the assets. This means an effective transfer to a wallet or account in the recipient's name.
The proceeds of the sale must remain at the exclusive disposal of the recipient. If the donor recovers the sale proceeds in one way or another, this is a major red flag for the tax authorities. This would be the case, for example, if the recipient purchases a vehicle for the donor with the money from selling the gifted cryptos.
The gift must be finalized and declared before any conversion by the recipient. Chronological order matters.

An important clarification: the fact that the recipient sells shortly after the gift is not in itself a criterion for abuse of rights. Case law has upheld arrangements where the sale took place shortly after, provided that the three conditions above were met.

The gift - a powerful tool, to be handled with care

The gift-then-sell strategy for crypto-assets is an estate planning lever that deserves to be known, but not improvised. The choice between a simple gift and a gift-partition, the impact of the matrimonial regime, the trap of smoothing within the same tax household - each parameter can radically change the outcome of the transaction.

One final point: this article is purely informational and although written in English, this article applies to France. Its author is not a lawyer. Before embarking on a gift-then-sell strategy for crypto-assets, seek the guidance of a tax lawyer or a notary. Every estate situation has its own particularities, and the amounts at stake more than justify the investment.