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CGT event for trading cryptocurrency with a family member

Newbie

Views 419

Replies 2

Hello all,

 

I have a question in regard to buying and selling crypto with a family member, on my trading account, and I would like to find out who pays the Capital Gains Tax (CGT).

 

I've noticed there were 2 posts with similar questions asked already at here: Buying and selling cryptocurrency for friends and family and another on here Transacting with cryptocurrency on behalf of someone else  , but I feel like the answer don't fully answered my question.

 

So, when I first invested in cryptocurrency last year, me and my dad both put in $2000 ($4000 in total, and we do have the bank transaction histories) to my exchange account, and I was doing trading for us. We agreed (written) that once we made some profits in the future we will split evenly.

 

In the last financial year, we made $2000 profits, and recently I sold all our crypto assets for $8000 AUD and transferred back to my bank account and then I transferred $4000 to my dad's bank account. So, am I responsible for paying the $2000 CGT from last financial year plus $4000 CGT for this financial year, as it was under my exchange account? or do we both pay the $3000 CGT? 
 

Any help in finding answers to my questions would be greatly appreciated.

 

Thank you

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @LeonS,

 

Generally if you have purchased cryptocurrency on behalf of someone else and can demonstrate this is the case, then it is not considered a CGT event transferring it back to them. See our post on this here.

 

However you mentioned you are the owner of the wallet and your father gave you money towards the purchase costs. As @macfanboy has advised, you may need to declare this CGT event on your tax return and ask your father for some assistance. Alternately you can contact our Early Engagement team to see what they advise.

 

Bear in mind if you held the currency for longer then 12mnths and you're an Australian resident for tax purposes, you can also apply the 50% discount.

 

I hope this helps.

 

All the best.

2 REPLIES 2

Taxicorn

Replies 0

@LeonS 

 

If the cryptocurrency wallet is under you name then you are liable for the CGT regardless of what arrangement you had.

Ask you father to help pay it seeing he benefited.

 

Most helpful response

ATO Community Support

Replies 0

Hi @LeonS,

 

Generally if you have purchased cryptocurrency on behalf of someone else and can demonstrate this is the case, then it is not considered a CGT event transferring it back to them. See our post on this here.

 

However you mentioned you are the owner of the wallet and your father gave you money towards the purchase costs. As @macfanboy has advised, you may need to declare this CGT event on your tax return and ask your father for some assistance. Alternately you can contact our Early Engagement team to see what they advise.

 

Bear in mind if you held the currency for longer then 12mnths and you're an Australian resident for tax purposes, you can also apply the 50% discount.

 

I hope this helps.

 

All the best.