A lot of investors don’t understand their liability, warn tax agents, while others call for the complicated Australian system to be overhauled
Mark Chapman, director of tax communications for H&R Block, told Guardian Australia the company was expecting thousands of clients seeking help with their crypto investments this year, adding they tended to have at least some knowledge of their tax obligations.
With the ATO indicating it will pay close attention to cryptocurrency assets this tax season, here’s what you need to know.If you cash out your cryptocurrency back into your regular bank account you’ll have to pay capital gains tax on the money you made. Any capital gain you make will be added to your taxable income and taxed at your individual income tax rate.
You can use cryptocurrency to pay for personal use of goods or services up to $10,000, such as for a holiday or a car. But Chapman warned the ATO would be closely scrutinising these sorts of transactions to determine whether the end purchase was the sole reason for buying cryptocurrency.
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