Up to a third of Australians who have sold Cryptocurrency over the past 12 months may be in for a shock when they lodge their tax return this year.
A recent survey found eight percent of people didn’t know the digital asset wasn’t tax-free when sold for a profit, with a further 25 percent of those surveyed unsure.
Leading Australian Crypto analyst Sydel Sierra said it was vital that coin holders knew the rules around Cryptocurrency.
“A lot of people hear that Crypto is decentralised and think that means it’s unregulated. That’s not entirely true,” Ms Sierra said.
She said 49 percent of respondents who didn’t know that Crypto was subject to tax said they were tertiary educated, proving that even university graduates weren’t up with the rules.
“With an estimated 4.5 million Cryptocurrency owners in Australia, and 33 percent either not knowing or are unsure if their profits would incur tax, that means there’s almost 1.5 million coin holders who probably haven’t budgeted for it.”
Ms Sierra said each Crypto asset triggered its own tax event.
“If investors are not aware, they may omit this on their annual tax return and be contacted by the Australian Taxation Office later when it is discovered.”
She said ignorance was no excuse.
“I, myself, copped a whopping big tax bill when I first made a profit on my Crypto, so I know what it’s like.
“The reality is, Cryptocurrencies are treated as personal income in Australia rather than a currency, which means when you sell, it will be subject to tax if there’s a capital gain.
“This is obvious, but you need to budget for that – you could be up for hundreds of thousands of dollars.”
