According to the Australian Taxation Office (ATO) a gift is the voluntary transfer of money or property.
The donor does not expect nor receive anything in return for the gift, experiencing no material benefit.
If you’ve been keeping up to date with Crest articles, you might have seen topics based upon cryptocurrency (aka crypto). These are the digital currency and assets used by some to buy goods and services.
But what about ‘gifting’ in crypto? Is it a taxable event? What else should you know about it?
Find out with the crypto tax experts at Crest Accountants below.
Did you know that giving your cryptocurrency to someone else as a gift is a capital gains event, and therefore a taxable event? Not everyone is aware of this reality.
Why is this so?
The ATO has adopted the view that cryptocurrency is neither money nor foreign currency but is instead an asset for capital gains tax (CGT) purposes.
Similar to shares, if you have transfer shares to someone else, the ATO’s view is that you have disposed of the shares and a CGT event has occurred.
How is this taxed?
Gifting cryptocurrency is treated the exact same way as when you sell your cryptocurrency at market rates. Here you must include any and all capital gains or losses in your end of year calculations.
What about if you’re a crypto gift recipient?
If you’re the recipient of crypto gifting, don’t worry – you only need to pay capital gains at the disposal of the gifted cryptocurrency.
In cases like these, you will use the market value on the day you received it when it comes to calculating any capital gains or losses.
Stay tuned for an upcoming article which will be defining crypto traders and crypto investors
Need help understanding tax on crypto?
Contact Crest Accountants today for expert tax advice on crypto and more.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.