INTHEBLACK July/August 2023 - Magazine - Page 48
F E AT U R E
READ
CPA Australia’s joint
submission on the
review of the tax
treatment of digital
assets and
transactions
in Australia
48 INTHEBLACK July/August 2023
If it can be shown that crypto is not being
used as an investment, in a profit-making
scheme, or in carrying on a business – and
costs less than A$10,000 – it may be a
“personal use asset” and not subject to CGT. If
crypto is used as a personal use asset, the loss
cannot be considered when calculating a net
capital gain to carry forward in future years.
Elinor Kasapidis, CPA Australia’s head
of policy and advocacy, notes that “the
challenge for many tax practitioners is not
only ensuring that clients disclose their
crypto holdings and transactions come tax
time, but also wading through multitudes
of transactions to calculate CGT properly.
“The innovative nature of some digital
assets can also result in tax uncertainty
around certain events or assets such as
airdrops or non-fungible tokens,” she says.
To calculate CGT, clients will need
to have excellent records. It is worth
considering recommending and using
specialist tax software for crypto.
DO NOT IGNORE THE ATO
The ATO has noted an increase in the
number of practitioners failing to ask
clients if they have transacted in crypto.
“Where we have high-quality crypto
data, we can display an informative
pre-fill message in our myTax and tax
agent online services. In 2022, we did
this for nearly a million individual tax
returns,” an ATO spokesperson says.
Some clients believe they are carrying
on a business in trading crypto. The ATO
encourages agents to consider how their
clients’ circumstances compare to indicators
