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Dual Citizen ceasing to be australian resident - Cryptocurrency tax

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Hi there,

I am a dual citizen. I have the intent to leave Australia and live in my birth country for a few years.
I may come back to live in Australia (in five to ten years) depending on the opportunities I could get.
I purchased cryptocurrencies in 2018 and held them since then. The value of the portfolio has increased.

Is leaving Australia a taxable event?
Can I keep holding my cryptocurrencies, or should I sell those?

 

For information, I own an investment property in Australia, so I will keep filling a tax return every year as a non-Australian resident for tax purposes.

 

Thank you!

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Most helpful response

ATO Community Support

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Hi @205J,

 

Leaving Australia isn't a taxable event.

 

However, if your tax residency status changes from an Australian resident for tax purposes to a non-resident for tax purposes, then you are taken to have disposed of your capital gains tax (CGT) assets that aren't Australian taxable property for their market value at the time you ceased being a resident.

 

Cryptocurrency falls within the description of a CGT asset, so if your tax residency does change, then you’d need to declare any capital gains/losses accordingly on the relevant financial year tax return to us. If this occurs, and in later years you actually sell (dispose) of the cryptocurrency, then you wouldn't need to report the disposal event to us.

 

It's also important to note that disposal (a CGT event) can occur through other actions, not just through selling.
Disposal occurs when you:
• sell or gift cryptocurrency
• trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)
• convert cryptocurrency to fiat currency (a currency established by government regulation or law ), such as Australian dollars, or
• use cryptocurrency to obtain goods or services.

 

If your cryptocurrency is being used as an investment, and you hold it for 12 months or more before disposing of it (while still an Australian tax resident), then you may be eligible for a capital gains tax (CGT) discount to reduce the capital gain you make through the disposal. I'll include a link to information about this, as well as the guide to capital gains tax that might be useful.

 

I'll also provide a link to a few forum posts too.

 

ATO website- Changing residency

ATO website- CGT assets and exemptions

ATO website- Transacting with cryptocurrency

ATO website- Guide to capital gains tax

Community forum- CGT shares after leaving Australia

Community forum- Cryptocurrency for tax return

RachATO

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @205J,

 

Leaving Australia isn't a taxable event.

 

However, if your tax residency status changes from an Australian resident for tax purposes to a non-resident for tax purposes, then you are taken to have disposed of your capital gains tax (CGT) assets that aren't Australian taxable property for their market value at the time you ceased being a resident.

 

Cryptocurrency falls within the description of a CGT asset, so if your tax residency does change, then you’d need to declare any capital gains/losses accordingly on the relevant financial year tax return to us. If this occurs, and in later years you actually sell (dispose) of the cryptocurrency, then you wouldn't need to report the disposal event to us.

 

It's also important to note that disposal (a CGT event) can occur through other actions, not just through selling.
Disposal occurs when you:
• sell or gift cryptocurrency
• trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)
• convert cryptocurrency to fiat currency (a currency established by government regulation or law ), such as Australian dollars, or
• use cryptocurrency to obtain goods or services.

 

If your cryptocurrency is being used as an investment, and you hold it for 12 months or more before disposing of it (while still an Australian tax resident), then you may be eligible for a capital gains tax (CGT) discount to reduce the capital gain you make through the disposal. I'll include a link to information about this, as well as the guide to capital gains tax that might be useful.

 

I'll also provide a link to a few forum posts too.

 

ATO website- Changing residency

ATO website- CGT assets and exemptions

ATO website- Transacting with cryptocurrency

ATO website- Guide to capital gains tax

Community forum- CGT shares after leaving Australia

Community forum- Cryptocurrency for tax return

RachATO