Crypto Capital Gains Tax in Australia — Worked Examples for Every Scenario

The Core Framework — Quick Reference

In Australia, the Australian Taxation Office (ATO) does not view cryptocurrency as money or foreign currency. Instead, it is treated as a form of property. This classification is the bedrock of its tax treatment. Every time you dispose of a crypto asset, a Capital Gains Tax (CGT) event occurs. A 'disposal' is a broad term that includes selling for Australian dollars, swapping for another cryptocurrency, using it to pay for goods or services, or even gifting it to someone else. The resulting capital gain or loss is calculated in AUD at the time of each transaction.

The key to reducing your tax bill is the 50% CGT discount, available to individuals who hold an asset for over 12 months. Capital losses are also a critical component; they cannot be used to reduce your regular income, but they can be used to offset capital gains from any source in the same financial year, or carried forward indefinitely to offset future gains. A final distinction is that earnings from activities like staking, mining, or airdrops are classified as ordinary income upon receipt, not a capital gain.

Example 1 — Simple Buy and Sell (Short-Term)

This is the most straightforward scenario. An investor buys a crypto asset and sells it for a profit within 12 months, meaning no CGT discount is available. The full profit is added to their assessable income for the financial year.

Let's assume an investor, Sarah, buys 0.5 BTC on 10 January 2025. She holds it for approximately seven months before selling.

• Purchase: 0.5 BTC for $20,000 AUD
• Brokerage Fee: $100 AUD
• Date of Sale: 15 August 2025
• Sale Price: 0.5 BTC for $35,000 AUD
• Assumed Marginal Tax Rate: 37% (for FY24/25 income between $120,001–$180,000)

First, we determine the Cost Base. This is not just the purchase price; it includes incidental costs like brokerage fees.

Cost Base = Purchase Price + Brokerage Fees
Cost Base = $20,000 + $100 = $20,100 AUD

Next, we calculate the capital gain. This is the sale price (capital proceeds) minus the cost base.

Capital Gain = Capital Proceeds - Cost Base
Capital Gain = $35,000 - $20,100 = $14,900 AUD

Because Sarah held the Bitcoin for only seven months (less than 12 months), she is not eligible for the 50% CGT discount. The entire $14,900 is treated as assessable income. The tax payable is this gain multiplied by her marginal tax rate.

Tax Payable = Net Capital Gain × Marginal Tax Rate
Tax Payable = $14,900 × 0.37 = $5,513 AUD

This amount would be added to her total tax liability for the financial year.

Example 2 — Buy and Sell (Long-Term, 50% Discount)

This example demonstrates the significant tax advantage of holding an asset for more than 12 months. Let's use a similar scenario to Example 1, but adjust the dates to qualify for the CGT discount.

Sarah buys 0.5 BTC on 10 January 2024 and holds it for over a year.

• Purchase: 0.5 BTC for $20,000 AUD
• Brokerage Fee: $100 AUD
• Date of Sale: 15 March 2025 (Held for ~14 months)
• Sale Price: 0.5 BTC for $50,000 AUD
• Assumed Marginal Tax Rate: 37%

The cost base calculation remains the same:

Cost Base = $20,000 + $100 = $20,100 AUD

The gross capital gain is calculated next:

Gross Capital Gain = Capital Proceeds - Cost Base
Gross Capital Gain = $50,000 - $20,100 = $29,900 AUD

Because Sarah held the asset for more than 12 months, she can apply the 50% CGT discount.

Discountable Amount = $29,900 × 50% = $14,950
Net Capital Gain = Gross Gain - Discount = $29,900 - $14,950 = $14,950 AUD

Only the net capital gain of $14,950 is added to her assessable income. The tax payable is:

Tax Payable = Net Capital Gain × Marginal Tax Rate
Tax Payable = $14,950 × 0.37 = $5,531.50 AUD

By holding for just over two additional months to cross the 12-month threshold, Sarah's taxable income from this gain was halved, resulting in a significant tax saving. To see the impact directly, compare the tax on the same gain without the discount:

Example 3 — Crypto-to-Crypto Swap

This is one of the most misunderstood aspects of crypto tax in Australia. Many investors believe that as long as they stay within the crypto world and don't cash out to AUD, no tax is payable. This is incorrect. The ATO considers a swap from one crypto asset to another as a disposal of the first asset.

A common and costly mistake is assuming crypto-to-crypto trades are tax-free. The ATO is explicit: swapping Bitcoin for Ethereum is a disposal of Bitcoin, crystallising a capital gain or loss at that moment. The new Ethereum is acquired at its market value in AUD at the time of the swap.

Let's say an investor, Tom, holds 1 ETH which he bought for $2,000 AUD. A few months later, the price of ETH has risen. He decides to swap it directly for Solana (SOL) on a decentralised exchange.

• Initial Purchase: 1 ETH for $2,000 AUD (Cost Base)
• Date of Swap: 5 months after purchase
• Value at Swap: 1 ETH is now worth $5,000 AUD

When Tom swaps his 1 ETH for SOL, two things happen for tax purposes:

1. Disposal of ETH: He "sells" his ETH. The capital proceeds are the AUD market value at the time of the swap.
2. Acquisition of SOL: He "buys" SOL. The cost base for his new SOL is its AUD market value at that same moment.

We calculate the capital gain on the disposed ETH:

Capital Proceeds (from ETH) = $5,000 AUD
Cost Base (of ETH) = $2,000 AUD

Capital Gain = $5,000 - $2,000 = $3,000 AUD

Since Tom held the ETH for less than 12 months, the full $3,000 gain is assessable income, liable for tax at his marginal rate. He now holds SOL with a cost base of $5,000, which will be used to calculate the gain or loss when he eventually disposes of that SOL.

Example 4 — Multiple Purchases (Cost Base, FIFO)

Investors rarely buy their entire crypto position in a single transaction. More commonly, they "dollar-cost average" (DCA) by making multiple purchases over time at different prices. When they sell a portion of their holdings, they need a method to identify which specific coins are being sold to calculate the cost base.

The ATO allows any reasonable identification method, but the most common and easily defensible is "First-In, First-Out" (FIFO). This method assumes the first coins you bought are the first ones you sell.

Let's say an investor, Jane, makes the following BTC purchases:

• Jan 2025: Buys 0.1 BTC for $4,000 (at $40,000/BTC)
• Mar 2025: Buys 0.1 BTC for $5,000 (at $50,000/BTC)
• Jun 2025: Buys 0.1 BTC for $6,000 (at $60,000/BTC)

In December 2025, Jane sells 0.15 BTC for $10,500 AUD (at a market price of $70,000/BTC). To calculate her capital gain, we must first determine the cost base of the 0.15 BTC she sold using FIFO.

The 0.15 BTC sold consists of:

• The entire first parcel of 0.1 BTC (bought in Jan for $4,000).
• Half of the second parcel, which is 0.05 BTC (bought in Mar for $2,500, which is half of $5,000).

Cost Base of Sold BTC = $4,000 (Jan parcel) + $2,500 (part of Mar parcel) = $6,500 AUD

Now we calculate the capital gain:

Capital Proceeds = $10,500
Cost Base = $6,500

Capital Gain = $10,500 - $6,500 = $4,000 AUD

Since all parcels were held for less than 12 months, the full $4,000 is added to Jane's assessable income. Her remaining holding is 0.15 BTC with a cost base of $2,500 (remaining Mar parcel) + $6,000 (Jun parcel) = $8,500.

Example 5 — Staking Rewards as Income

Staking involves locking up crypto assets to support a network's operations, for which you receive rewards in the form of new coins. The ATO treats these rewards as ordinary income, not as a capital gain upon receipt.

The amount of income to declare is the fair market value (in AUD) of the rewards on the day they are credited to your wallet. This value also becomes the cost base for those specific coins when you eventually sell or swap them.

Imagine an investor stakes 10 ETH for a year. They receive rewards quarterly. For simplicity, we'll assume a single receipt each quarter.

• Q1 Reward: 0.1 ETH received when ETH price was $4,000/ETH. Income = $400
• Q2 Reward: 0.1 ETH received when ETH price was $3,500/ETH. Income = $350
• Q3 Reward: 0.1 ETH received when ETH price was $5,000/ETH. Income = $500
• Q4 Reward: 0.1 ETH received when ETH price was $6,000/ETH. Income = $600

The total ordinary income to declare for the financial year from staking is:

Total Staking Income = $400 + $350 + $500 + $600 = $1,850 AUD

This $1,850 is added to the investor's assessable income and taxed at their marginal rate. Later, if the investor sells the 0.4 ETH they earned, the cost base for calculating the capital gain would be the sum of the values at which each parcel was assessed as income—in this case, $1,850.

Example 6 — Capital Losses

Not every investment is a winner. When you sell a crypto asset for less than its cost base, you make a capital loss. These losses are valuable because they can be used to reduce capital gains you've made on other assets (crypto, shares, property, etc.).

A key rule is that capital losses can only offset capital gains. They cannot be used to reduce your ordinary income from a salary or business.

Let's consider an investor who bought into Terra (LUNA) before its collapse.

• March 2022: Buys $5,000 AUD worth of LUNA.
• May 2022: The LUNA token value collapses to effectively zero.

If the investor sells the worthless tokens on an exchange for $0 (or a negligible amount), they crystallise a capital loss. The ATO may also accept that a crypto asset is abandoned or lost if it becomes truly worthless and unrecoverable, creating a CGT event.

Capital Loss = Capital Proceeds - Cost Base
Capital Loss = $0 - $5,000 = -$5,000 AUD

Now, how can this loss be used? Let's consider two scenarios for the same financial year:

Scenario A: The investor also has a capital gain.
Suppose the same investor made an $8,000 capital gain from selling Bitcoin. They can use the LUNA loss to offset this gain.

Net Capital Gain = Total Gains - Total Losses
Net Capital Gain = $8,000 - $5,000 = $3,000 AUD
Only $3,000 is added to their assessable income, saving them tax on the $5,000 of shielded gains.

Scenario B: The investor has no other capital gains.
If the investor has no capital gains in that year, the $5,000 loss cannot be used immediately. Instead, it is carried forward to the next financial year. If they realise a capital gain in a future year, they can use this carried-forward loss to reduce it. These losses can be carried forward indefinitely.

Example 7 — SMSF Advantage

Using a Self-Managed Super Fund (SMSF) to invest in crypto can offer substantial tax advantages for long-term holders. During the "accumulation phase" (while you are still working and contributing to your super), the tax rate on income and capital gains within the fund is a flat 15%.

Furthermore, while SMSFs also get a CGT discount for assets held over 12 months, it is a one-third (33.3%) discount, not the 50% available to individuals. Let's re-run the numbers from Example 2, but this time with the BTC held inside an SMSF.

• Gross Capital Gain: $29,900 AUD (from selling 0.5 BTC held over 12 months)
• Fund Status: Accumulation Phase

First, we apply the SMSF's CGT discount:

Discountable Amount (1/3) = $29,900 × (1/3) = $9,966.67
Net Capital Gain = Gross Gain - Discount = $29,900 - $9,966.67 = $19,933.33 AUD

This net gain is then taxed at the superannuation tax rate of 15%.

Tax Payable in SMSF = Net Capital Gain × 15%
Tax Payable in SMSF = $19,933.33 × 0.15 = $2,990 AUD

Let's compare this to the tax paid personally (from Example 2) on the same gross gain:

• Personal Tax Payable (at 37%): $5,531.50 AUD
• SMSF Tax Payable (at 15%): $2,990 AUD
• Tax Saving: $2,541.50 AUD

The flat 15% tax rate, even with a smaller discount, results in a significantly lower tax bill. This makes SMSFs a powerful structure for long-term crypto investors, though they come with their own administrative costs and responsibilities. To learn more about the complete tax picture, head to our main guide. Learn More

Record Keeping — What You Must Keep

Accurate record keeping is not optional; it is a legal requirement. The ATO can audit your tax affairs for several years, and without proper records, you cannot prove your cost base, holding periods, or transaction details, which can lead to adverse assessments and penalties. Keeping detailed records from your very first transaction is essential.

The era of treating crypto as an untraceable asset is definitively over in Australia. The ATO's data matching program means they receive a feed of all your trading activity from every Australian-based exchange. They know you traded; the only question is whether your declaration matches their data.

For every single transaction, you must record:

• The date of the transaction.
• The type of crypto asset (e.g., Bitcoin, ETH).
• The quantity of the crypto asset.
• The value in Australian dollars (AUD) at the time of the transaction.
• The nature of the transaction (e.g., buy, sell, swap, staking reward received).
• The wallet addresses involved and exchange records.

Manually tracking this across thousands of trades is nearly impossible. This is why most serious investors use specialised crypto tax software. These platforms connect to your exchange and wallet accounts via API, automatically import your transaction history, and generate the necessary reports for your tax return. A popular solution for Australian investors is Koinly, which automates much of this painful process.

For individuals looking to place their crypto tax obligations within a wider financial context, bespoke guidance can be helpful. For broader Australian investment tax strategy including CGT on shares and property, see WealthWatchPro → This ensures your crypto activities align with your overall wealth management goals. You can also explore hardware security with Ledger or get secure access with NordVPN. For trading itself, you can use Coinbase or Binance. Always monitor macro market conditions using our Live Data tools before making decisions.

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Disclaimer: The information provided on this website is for general informational purposes only. It is not intended as, and should not be construed as, personal financial or tax advice. All examples are illustrative. The tax treatment of cryptocurrency can be complex and depends on your individual circumstances. You should consult with a qualified professional tax advisor to understand your specific tax obligations. CoinHours.com is not a financial or tax advisor.