You have invested in cryptocurrency for the first time, so how will this effect your tax?
There has been a dramatic increase in trading of cyrptocurrencies in the past 12 months, and as such it is now in the ATO radar.
“This year, we will be writing to around 100,000 taxpayers with cryptocurrency assets explaining their tax obligations and urging them to review their previously lodged returns. We also expect to prompt almost 300,000 taxpayers as they lodge their 2021 tax return to report their cryptocurrency capital gains or losses.”
If you use cryptocurrency in your business then you are subject to the trading stock rules, however for an individual, this trading of crypto falls under the capital gains tax regime.
You will need to keep records of all transactions, including dates, AUD value, the nature of the transaction, exchange receipts, legal costs and other parties involved in the sale or purchase. Holding Crypto for at least 12 months may also mean that the investor is entitled to a CGT discount if they have made a capital gain.
The ATO is matching this data to cryptocurrency designated service providers, so don’t be caught out this tax time.
