Moving Overseas with Cryptocurrency Investments: Tax Implications

  • 15 October, 2024
  • 6 min read
crypto tax article graphic

When relocating overseas with cryptocurrency investments, Australian residents must navigate complex tax implications. The Australian Taxation Office (ATO) has specific rules regarding the treatment of crypto assets for those leaving the country.

Capital Gains Tax Event

Leaving Australia permanently triggers a capital gains tax (CGT) event for your cryptocurrency holdings. This means you’re deemed to have disposed of your crypto assets on the date you cease being an Australian tax resident, even if you haven’t actually sold them.

Calculating Capital Gains

To determine your capital gains or losses, you’ll need to:

  1. Establish the market value of your crypto assets on the day you leave Australia.
  2. Calculate the difference between this value and your original purchase price.
  3. Report any gains or losses on your final Australian tax return.
Options for Handling CGT

When leaving Australia with crypto investments, you have two main options:

  1. Pay CGT immediately: Calculate and pay the tax on your unrealised gains before departing.
  2. Defer CGT payment: Choose to defer the CGT liability until you actually dispose of the assets.

If you opt to defer, it’s crucial to maintain detailed records of your crypto holdings and their value at the time of your departure.

Ongoing Tax Obligations

Even after leaving Australia, you may still have tax obligations:

  • If you maintain ties to Australia (e.g., property ownership), you might still be considered a tax resident.
  • Any income or capital gains from Australian sources, including crypto assets held on Australian exchanges, may still be taxable in Australia.

Double Taxation Considerations

Australia has tax treaties with many countries to prevent double taxation. If you’re moving to a country with such an agreement, you may be able to claim credits for taxes paid in Australia against your tax liability in your new country of residence.

Record Keeping

The ATO emphasises the importance of maintaining comprehensive records of your crypto transactions. This includes:

  • Purchase and sale dates
  • The value of crypto in AUD at the time of transactions
  • The purpose of each transaction
  • Details of the other party involved (even if it’s just their crypto wallet address)

Seeking Professional Advice

Given the complexity of international tax law and the rapidly evolving nature of cryptocurrency regulations, it’s highly recommended to consult with a tax professional specialising in both the Australian tax law and cryptocurrency before making your move. 

Conclusion

Moving overseas with cryptocurrency investments requires careful planning and consideration of Australian tax laws. By understanding your obligations and options, you can ensure compliance with ATO regulations and potentially minimise your tax liability. Remember, transparency and accurate record-keeping are key to avoiding future complications with the ATO.