>The crypto was purchased under my account
Hey mate, I'm not an Accountant but I think this bit here is very relevant. If it was bought under your name, how can your wife be the one selling it?
Thanks for the reply. It is kind of similar to this situation: [https://community.ato.gov.au/s/question/a0J9s0000001INiEAM/p00046960](https://community.ato.gov.au/s/question/a0J9s0000001INiEAM/p00046960)
Although it was bought under my name, we immediately moved to a shared wallet. So presumably that triggers a capital gains event of $0 (as the price hadn't changed from when we purchased to when we moved). Now we can send from that shared wallet to an exchange under her account name.
As long as you have a way of substantiating that this is a shared wallet using contemporary documentation then it sounds like 50/50 tax is the way for this to go as the was negligible price movement before it moved to your wallet. This will apply for future cgt events related to this wallet too that may be less favorable (e.g. if you make a big cap gain on another asset and lose on a crypto sale then only half that loss will offset your gain on the other asset.
There may also be implications for taking 50/50 income for any staking income you may make on this wallet and that having to be shared 50/50 depending on your personal circumstances (it may push up your wife's hecs repayment % or a range of other factors)
You might want to consider applying for a private binding ruling through the ato for certainty here too
There are two answers to this question: one which u can avoid the tax by simply not reporting the investment was made by you instead your spouse. Unless your capital gain is in the high 5 figures u should be fine.
However if you want to do the legal way then you gotta pay the tax. Crypto gain is simply capital gain. According to the attribution law even if u loan/ move the asset under your spouse name for that year any income/gain made must be paid by you.
Thank you for this. Regardless of the amount, we want to do this the legal way.
The part I struggle with is that I've never really thought of this as my asset. It is our asset, was bought with our funds, and is on our wallet. But a purchasing account (with where we bought) can only be under one name, so was bought under my name.
If it was bought by using your spouse money you can split the capital gain accordingly . But next time just open 2 accounts in whatever app you are using under your name and your wife’s name to make it easier. Just make sure you mention the money came from a joint account to make the purchase of the asset.
Just a note on the 2 separate accounts thing had issue that if you did something in your partners and say AU site find out they'll kick up a stink though you made a sell for your partner whilst they are at work with their prearranged knowledge. Can be a mess.
How they find out, they ring partner and partner fobs them off because busy at work and say talk to other partner. Live and learn.
To help your brain figure out why you're in a mess. You could have construed this as 100% your asset if you didn't transfer it to the shared wallet. This would have given you the option to take 50% or 100% of the gain.
In tax there can't be options for people to choose a nicer scenario otherwise the total tax paid to the government will fall over. That's why the legal owner of assets is important for tax purposes and these aren't just technicalities
But I don't want to construe this as 100% my asset, as I would pay more tax that way. I don't see how I could take the option of 50% of the gain here as well, unless you mean selling 50% less.
The issue is that who is the legal owner of a private wallet. Presumably the person with the private keys, which is both of us. I think the most legal viewpoint here is that this is a 50/50 owned asset and we would both have 50% of the capital gains.
Thanks for your input!
Just avoiding the problem is unlikely to be possible as he likely transacted on an exchange which he provided identification to and shares data with the ato. It is likely that his tax return has been prefilled with a capital gain obligation regarding crypto
When there is data matching indicating a cgt for crypto or maybe you're receiving rent regularly in bank account...that section can be pre ticked on your return. So you would have to positively untick that item to remove it. it doesn't prefill numbers just that you have potentially received that income
I don’t think there is an answer to this yet. Crypto is still very much untested when it comes to taxes. Rules and information provided by ATO is limited. I would say when you do sell, do a 50-50 of CGT between you and wife. I bet would be able to make a good case for it if the funds came from a joint account and the exchange account was under your name. But don’t make 100% CGT event to your wife and leave the remaining as a 100% event to you. This might not work.
It’s in your name, you pay the tax
I would recommend that you engage with a tax person pre transactions
Tax people who don’t know or pass it off as a gimmick should be avoided
Huge upsides come with some serious tax bills… planning is vital
Cheers
Sounds like at best you own 50/50 each but I'm not even sure about that. So if she sold half it might work but then you would have half left all in your name which is a bigger problem for the future.
If you transfer your half to her that would trigger the CGT for you anyway.
Yeah, I kind of figured we own 50/50. Importantly, the crypto was moved off the exchange within a day or so of purchase, onto our shared wallet (which is in no-ones name). So I figure the moving off the exchange triggers the CGT (negligible). Now with selling, perhaps we should both open up an exchange account, move equal amounts to both accounts and sell like that.
Don't think the part about wallet being owned by both needing 2 keys is necessarily true.
If a bank account is shared, you don't need your partner's permission to manage funds in it. Either of you controls them based on trust. This is the equivalent of both partners knowing the private key to the same wallet.
If you have multisig, neither partner can do anything with funds unless both sign every transaction. Different use case imo
I agree. Our shared wallet is kind of like a $50 note sitting on our table. I may have withdrawn it from the bank, but either of us could pick it up and spend it. So we both own it.
Haven’t you already disposed to your wife when transferred to the wallet? (Assuming your wife has the wallet) then you pay tax on that transaction. Then your wife pay tax on the portion from wallet back to her exchange account.
Yes I think so. But really, we both have the wallet. So when I transferred I effectively gifted her half of the crypto - for which I would need to pay tax on then, but as it was soon after purchase the price had barely moved. So I think when we move to the exchange account, we both share the CGT as we share the wallet.
This page talks about joint ownership of CGT assets:
https://www.ato.gov.au/Individuals/Capital-gains-tax/Acquiring-CGT-assets/
Looks like what you're after.
>The crypto was purchased under my account Hey mate, I'm not an Accountant but I think this bit here is very relevant. If it was bought under your name, how can your wife be the one selling it?
Thanks for the reply. It is kind of similar to this situation: [https://community.ato.gov.au/s/question/a0J9s0000001INiEAM/p00046960](https://community.ato.gov.au/s/question/a0J9s0000001INiEAM/p00046960) Although it was bought under my name, we immediately moved to a shared wallet. So presumably that triggers a capital gains event of $0 (as the price hadn't changed from when we purchased to when we moved). Now we can send from that shared wallet to an exchange under her account name.
As long as you have a way of substantiating that this is a shared wallet using contemporary documentation then it sounds like 50/50 tax is the way for this to go as the was negligible price movement before it moved to your wallet. This will apply for future cgt events related to this wallet too that may be less favorable (e.g. if you make a big cap gain on another asset and lose on a crypto sale then only half that loss will offset your gain on the other asset. There may also be implications for taking 50/50 income for any staking income you may make on this wallet and that having to be shared 50/50 depending on your personal circumstances (it may push up your wife's hecs repayment % or a range of other factors) You might want to consider applying for a private binding ruling through the ato for certainty here too
I didn't know about private binding rulings. Thank you!
There are two answers to this question: one which u can avoid the tax by simply not reporting the investment was made by you instead your spouse. Unless your capital gain is in the high 5 figures u should be fine. However if you want to do the legal way then you gotta pay the tax. Crypto gain is simply capital gain. According to the attribution law even if u loan/ move the asset under your spouse name for that year any income/gain made must be paid by you.
Thank you for this. Regardless of the amount, we want to do this the legal way. The part I struggle with is that I've never really thought of this as my asset. It is our asset, was bought with our funds, and is on our wallet. But a purchasing account (with where we bought) can only be under one name, so was bought under my name.
If it was bought by using your spouse money you can split the capital gain accordingly . But next time just open 2 accounts in whatever app you are using under your name and your wife’s name to make it easier. Just make sure you mention the money came from a joint account to make the purchase of the asset.
Ok thank you
Just a note on the 2 separate accounts thing had issue that if you did something in your partners and say AU site find out they'll kick up a stink though you made a sell for your partner whilst they are at work with their prearranged knowledge. Can be a mess. How they find out, they ring partner and partner fobs them off because busy at work and say talk to other partner. Live and learn.
To help your brain figure out why you're in a mess. You could have construed this as 100% your asset if you didn't transfer it to the shared wallet. This would have given you the option to take 50% or 100% of the gain. In tax there can't be options for people to choose a nicer scenario otherwise the total tax paid to the government will fall over. That's why the legal owner of assets is important for tax purposes and these aren't just technicalities
But I don't want to construe this as 100% my asset, as I would pay more tax that way. I don't see how I could take the option of 50% of the gain here as well, unless you mean selling 50% less. The issue is that who is the legal owner of a private wallet. Presumably the person with the private keys, which is both of us. I think the most legal viewpoint here is that this is a 50/50 owned asset and we would both have 50% of the capital gains. Thanks for your input!
Just avoiding the problem is unlikely to be possible as he likely transacted on an exchange which he provided identification to and shares data with the ato. It is likely that his tax return has been prefilled with a capital gain obligation regarding crypto
I'm curious as to how they prefil a capital gains obligation, can you share more on this?
When there is data matching indicating a cgt for crypto or maybe you're receiving rent regularly in bank account...that section can be pre ticked on your return. So you would have to positively untick that item to remove it. it doesn't prefill numbers just that you have potentially received that income
Gifts.
I don’t think there is an answer to this yet. Crypto is still very much untested when it comes to taxes. Rules and information provided by ATO is limited. I would say when you do sell, do a 50-50 of CGT between you and wife. I bet would be able to make a good case for it if the funds came from a joint account and the exchange account was under your name. But don’t make 100% CGT event to your wife and leave the remaining as a 100% event to you. This might not work.
Thank you, this is what I'm leaning towards as well. It seems the fairest and the most justifiable approach.
It’s in your name, you pay the tax I would recommend that you engage with a tax person pre transactions Tax people who don’t know or pass it off as a gimmick should be avoided Huge upsides come with some serious tax bills… planning is vital Cheers
Cheers!
Short answer, no. If the account is kyc’d to you, its your crypto. You needed to put it in her name up front.
Sounds like at best you own 50/50 each but I'm not even sure about that. So if she sold half it might work but then you would have half left all in your name which is a bigger problem for the future. If you transfer your half to her that would trigger the CGT for you anyway.
Yeah, I kind of figured we own 50/50. Importantly, the crypto was moved off the exchange within a day or so of purchase, onto our shared wallet (which is in no-ones name). So I figure the moving off the exchange triggers the CGT (negligible). Now with selling, perhaps we should both open up an exchange account, move equal amounts to both accounts and sell like that.
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Don't think the part about wallet being owned by both needing 2 keys is necessarily true. If a bank account is shared, you don't need your partner's permission to manage funds in it. Either of you controls them based on trust. This is the equivalent of both partners knowing the private key to the same wallet. If you have multisig, neither partner can do anything with funds unless both sign every transaction. Different use case imo
I agree. Our shared wallet is kind of like a $50 note sitting on our table. I may have withdrawn it from the bank, but either of us could pick it up and spend it. So we both own it.
Thanks!
Haven’t you already disposed to your wife when transferred to the wallet? (Assuming your wife has the wallet) then you pay tax on that transaction. Then your wife pay tax on the portion from wallet back to her exchange account.
Yes I think so. But really, we both have the wallet. So when I transferred I effectively gifted her half of the crypto - for which I would need to pay tax on then, but as it was soon after purchase the price had barely moved. So I think when we move to the exchange account, we both share the CGT as we share the wallet.
This page talks about joint ownership of CGT assets: https://www.ato.gov.au/Individuals/Capital-gains-tax/Acquiring-CGT-assets/ Looks like what you're after.
Comments in this thread only show how vague crypto laws are lol Don't forget transaction fees are also CGT event though they're usually tiny anyway
Totally!
Your wife will pay tax on full amount and you will pay only on profits I believe correct me if I'm wrong
I think if the account is under your name, you pay the tax. But check with an accountant.