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Transferring or moving cryptocurrency from Exchange to Wallet

I'm new

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Hi everyone,

 

Here's my question and example scenario:

 

If I bought 100 units of Coin A on an Aussie Crypto Exhange back in 2020 for $1k, and Coin A has increased in value to $5k. I then move 100 units of Coin A to a wallet (i.e. Celsius Network) in order to stake it and earn rewards. Do I have to pay CGT or any tax on this event?

 

(P.S. I understand I will have to pay tax on the interest earned from staking afterwards)

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ATO Community Support

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Hi @atonewbie2021,

 

Transferring cryptocurrency between an exchange and wallet isn't considered a CGT event if the asset remains in your name (ie not sold, exchanged for another form of cryptocurrency, or transferred into someone else's name as a beneficiary). So you only need to declare a capital gain or loss when you dispose of the cryptocurrency.

 

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.

 

An exception to this is if the cryptocurrency is used as a personal use asset (whereby crypto is obtained and disposed in a short period of time to purchase personal items or services for yourself). In that case some capital gains or losses that occur during disposal aren't included for CGT purposes. Please take a look at our website link below 'transacting with cryptocurrency' for more information Smiley Happy

 

It's always important to keep a record of your transactions though to help work out your CGT obligations at tax time, and you need to keep these records for 5 years either after the transaction takes place or preparing the records (whichever is later).

 

I've also found another forum post with the identical question, and this is linked below too.

 

All the best!

 

ATO website- Transacting with cryptocurrency

ATO website- Record keeping for cryptocurrency

Forum post- Moving coins from exchange to hardware wallet

 

RachATO
 

1 REPLY 1

Most helpful response

ATO Certified Response

ATO Community Support

Replies 0

Hi @atonewbie2021,

 

Transferring cryptocurrency between an exchange and wallet isn't considered a CGT event if the asset remains in your name (ie not sold, exchanged for another form of cryptocurrency, or transferred into someone else's name as a beneficiary). So you only need to declare a capital gain or loss when you dispose of the cryptocurrency.

 

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.

 

An exception to this is if the cryptocurrency is used as a personal use asset (whereby crypto is obtained and disposed in a short period of time to purchase personal items or services for yourself). In that case some capital gains or losses that occur during disposal aren't included for CGT purposes. Please take a look at our website link below 'transacting with cryptocurrency' for more information Smiley Happy

 

It's always important to keep a record of your transactions though to help work out your CGT obligations at tax time, and you need to keep these records for 5 years either after the transaction takes place or preparing the records (whichever is later).

 

I've also found another forum post with the identical question, and this is linked below too.

 

All the best!

 

ATO website- Transacting with cryptocurrency

ATO website- Record keeping for cryptocurrency

Forum post- Moving coins from exchange to hardware wallet

 

RachATO