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CGT on Gifts to Spouse

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Sk
Newbie

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I made a few fairly small (<$2k total) investments in cryptocurrency over the last month which have lost their value over the last week.

I've finished making investments and am now planning to hold the portfolio for a few years. I wanted to transfer ownership of the portfolio to my wife who has a lower tax bracket than I do.

If I do this, am I effectively disposing of the assets and generating a cgt event? So I would be able to claim cgt losses for the difference between the purchase value and the market value when I transfer them to her ownership?

Any help would be appreciated.
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Anonymous

Replies 2

First of all a capital loss can only be offest against a capital gain.

 

Secondly when dealing with related parties, there is a principal known as " arms length transaction " ...

and you would have to demonstrate that you transfered / sold those bit coin to your wife at market value on the day, otherwise your activities could be viewed as tax avoidance.

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Taxicorn

Replies 0

It may be better if you sell them, make the loss.

 

Arrange for some more to be purchased under your wife's name, when they are at the lowest price.

 

This way there will be no reason why you can not achieve hwat you want with no questions asked.

 

 

 

Best answer

Anonymous

Replies 2

First of all a capital loss can only be offest against a capital gain.

 

Secondly when dealing with related parties, there is a principal known as " arms length transaction " ...

and you would have to demonstrate that you transfered / sold those bit coin to your wife at market value on the day, otherwise your activities could be viewed as tax avoidance.

Sk
Newbie

Replies 1

Cheers, hadn't considered the capital loss offsetting gains part.

 

Re: "arms length", that was the kind of transfer I was implying. My understanding is that every transfer of crypto from one wallet to another counts as a CGT event / asset disposal, so in transferring to my wife's wallets I'm disposing of them at the current market value and she's receiving them at current market value. I.e. my loss is the difference between original buy and the market value at the time of the transfer, and then she'd be taxed on any gains that arise from the market value and whatever value she disposes/sells them in the future. Is that accurate?

Anonymous

Replies 0

The ATO covers the arms length princple in many documents, and if you have a look at the following ATO ruling reference you will see that you are on the right path.     The ruling generally makes reference to a section of the income tax act that does not apply to you, but the principles of arms length are the same.

 

TR2002/2 paragraphs 16, 17 and 18

http://law.ato.gov.au/atolaw/view.htm?Docid=TXR/TR20022/NAT/ATO/00001

 

The tax legislation places the initial onus on the taxpayer to demonstate their position, so you need to make sure everything is appropriately documented.

 

This is only my personal view and I would always recomend seeking further advice, whether it be via an ATO ruling to give you peace of mind or third party professional

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