• 121 Online
  • 17838 Members
  • 19785 Posts

ATO Community

Paying a Franked Dividend in Crypto

Ask a question
Highlighted

Devotee Registered Tax Practitioner

Views 593

Replies 1

Nothing too complex on this one

 

ABC PTY LTD  has $2million in cryptocurrency Assets and has reported profits of $100,000 and $50,000 for the last 2 years

 

Franking Account Balance $41,250

Cash Assets $5,000

 

ABC PTY LTD wants to pay a dividend of $45,000 is it possible for the dividend to be paid in the equivalent value of cryptocurrency what are the tax implications to the company

 

n.b earnings of ABC pty Ltd are made from business activities related to cryptocurrency trading, mining and OTC brokerage

1 ACCEPTED SOLUTION

Accepted Solutions

Best answer

ATO Certified

Community Support

Replies 0

Hi @DanielH,

 

Thanks for your patience whilst we received specialist information regarding your query!

 

The distribution of property to a shareholder can be a dividend, see TR 2003/8 Income tax: distributions of property by companies to shareholders - amount to be included as an assessable dividend, so a dividend can be paid by transferring cryptocurrency to a shareholder.


The amount of the dividend would be the Australian Dollar value of the cryptocurrency when transferred.


The normal dividend franking rules would apply to a dividend paid using cryptocurrency.


The transfer of cryptocurrency held by the company, to its shareholder, may have income tax or capital gains tax consequences for the company, depending on the company’s circumstances. You can find further information about the tax treatment of cryptocurrencies on our website.

 

Thanks, JodieH.

1 REPLY 1

Best answer

ATO Certified

Community Support

Replies 0

Hi @DanielH,

 

Thanks for your patience whilst we received specialist information regarding your query!

 

The distribution of property to a shareholder can be a dividend, see TR 2003/8 Income tax: distributions of property by companies to shareholders - amount to be included as an assessable dividend, so a dividend can be paid by transferring cryptocurrency to a shareholder.


The amount of the dividend would be the Australian Dollar value of the cryptocurrency when transferred.


The normal dividend franking rules would apply to a dividend paid using cryptocurrency.


The transfer of cryptocurrency held by the company, to its shareholder, may have income tax or capital gains tax consequences for the company, depending on the company’s circumstances. You can find further information about the tax treatment of cryptocurrencies on our website.

 

Thanks, JodieH.

Top Solution Authors