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_sciencecookie(Initiate)Initiate
15 May 2021

We've recently been purchasing cryptocurrency on Binance using funds from a family trust without realizing it has options to create profiles for company/trust accounts, (our current account has been verified under my name as an individual). Funds has been contributed by all the individual members (into the trust investing bank account and then onto the exchange to trade) and we've all been using this account to trade. I'm currently at a lost as to what to do and have a few questions:

  • How can we now prove the crypto assests is owned by the trust? (We have bank statements from the trust investment account depositing money)
  • Does this mean all profits/losses will now be carried by me as an individual as CTG because the account is verified under my name despite being used by a number of people?
  • We also have a few different cold storage wallets that we have already moved coins off onto, how can we prove the trust owns these wallets? Or will this count as a CTG event?

Please help.

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7 replies
Liked by eastpascal3
13,435 views
7 replies

Most helpful response

Most helpful reply

KylieATO(Community Support)Community Support
19 May 2021

Hi @sciencecookie


If the account was set up in your name you would generally be treated as the owner of the cryptocurrency and you will need to declare any income or capital gains.


To demonstrate that someone (other than you) had beneficial ownership of the cryptocurrency that you purchased and traded, you would need to have documentation that shows the legal and beneficial ownership. This is the same whether the property in question was cryptocurrency, company shares or any other asset.


Ownership of the cryptocurrency must be clearly established by evidence and proper record keeping, including whether the account was set up initially in your name or the family trust. Evidence may include:

  • account statements from the platform
  • the initial registration or application form for the account set up
  • terms and conditions of the platform
  • payment records
  • relevant bank transactions.

Other evidence that might help are things like:

  • the terms of the trust deed
  • trust resolutions
  • minutes of meetings of the trustee
  • how the cryptocurrency has been treated in the relevant books of account
  • other accounting records such as journal entries and ledger accounts.

Given the electronic nature of cryptocurrencies, you have to make sure that there is a clear separation between the trust's assets and those of the trustees or beneficiaries.

All replies

KylieATO(Community Support)Community Support
18 May 2021

Hi @sciencecookie

Usually if the asset is in your name you need to report the income. We are checking to see if there are any other options available.

_sciencecookie(Initiate)Initiate
18 May 2021

Hi Kylie, thanks for getting back to us. I forgot to mention in the original post but we also have meeting minutes from last year when we first created the account that it was agreed between the beneficaries that the account (under xyz credentials) is owned by the trust and all members. Can that be used along with other meeting minutes where we agreed on investing decisions?

Most helpful reply

KylieATO(Community Support)Community Support
19 May 2021

Hi @sciencecookie


If the account was set up in your name you would generally be treated as the owner of the cryptocurrency and you will need to declare any income or capital gains.


To demonstrate that someone (other than you) had beneficial ownership of the cryptocurrency that you purchased and traded, you would need to have documentation that shows the legal and beneficial ownership. This is the same whether the property in question was cryptocurrency, company shares or any other asset.


Ownership of the cryptocurrency must be clearly established by evidence and proper record keeping, including whether the account was set up initially in your name or the family trust. Evidence may include:

  • account statements from the platform
  • the initial registration or application form for the account set up
  • terms and conditions of the platform
  • payment records
  • relevant bank transactions.

Other evidence that might help are things like:

  • the terms of the trust deed
  • trust resolutions
  • minutes of meetings of the trustee
  • how the cryptocurrency has been treated in the relevant books of account
  • other accounting records such as journal entries and ledger accounts.

Given the electronic nature of cryptocurrencies, you have to make sure that there is a clear separation between the trust's assets and those of the trustees or beneficiaries.

Liked by _sciencecookie
whiteskiesare(I'm new)I'm new
4 Apr 2024

Hi Kylie,


To clarify, most crypto services don't provide corporate/trust accounts, especially wallets and decetralised exchanged. At some point along the crypto purchasing process everyone will have to transfer trust funds to a personal account, not just temporarily in order to be purchased, but to be held, as crypto should not be help on centralised exchanges long term. Are you saying a contract of beneficial ownership will clarify entity ownership in the eyes of the ATO?


Thanks.

AriATO(Community Support)Community Support
10 Apr 2024

Hi @whiteskiesare


Correct. Legal ownership is different to beneficial ownership but in most cases the legal owner of a CGT asset is also the beneficial owner. Legal ownership can change but if beneficial ownership is the same then there's usually no CGT event for disposal as an example. We'd have to look at a situation more closely to confirm.

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