The Law Society has welcomed the formal recognition of digital assets as personal property in the upcoming Property (Digital Assets etc) Act, which received Royal Assent last week. For the first time digital assets will be formally recognised in law, putting them on the same footing as traditional categories of personal property.
The Society said the move would ‘modernise the country’s financial system, safeguard consumers and foster innovation.’
CEO Ian Jeffery added:
“The Property (Digital Assets etc) Act removes residual legal uncertainty around the status of digital assets as property and enables future development of the common law to respond to developments in technology and market practice.”
“By clearly defining digital assets as personal property, the new law helps courts handle relevant disputes and strengthens legal protection. It also stands to reinforce trust in digital markets, drives innovation and positions the UK as a leader in the digital industry. This important regulation creates a safer environment for people and businesses that can lead to more growth and more jobs.”
In law, property has previously been identified as:
- Things in possession (generally, tangible things), and
- Things in action (personal property that can only be claimed or enforced through a court action).
The development of digital property has caused issues when it comes to the passing on of assets in inheritance law and in contentious matters including divorce and probate. The new act reflects the work of the Law Commission’s 2023 recommendations to introduce a third category of personal property and the Law Society’s call for greater clarity.
People who own cryptocurrency and cryptographic tokens that prove ownership of digital assets such as videos, photos, websites, music and digital art can now officially consider them part of their estate.
The new Act will also enable people to take legal action in cases of theft, hacking or damage of digital property, and use digital assets as collateral for loans or mortgages.
