The Board of Taxation (BOT) has recently released its report on the taxation of digital assets – Review of the tax treatment of digital assets and transactions in Australia. This includes a section, from page 155, on whether crypto assets should receive the “trading stock” exemption.

Under the trading stock exemption most CGT assets of super funds, like listed shares and land, are taxed under the capital gains tax (CGT) regime, even if they would otherwise be treated as trading stock. This means, the super funds (including self managed superannuation funds (SMSFs) are eligible for the 1/3rd CGT discount if they have held those assets for 12 months or more.

The BOT considered submissions from the SMSF industry that crypto assets should likewise be carved out in the trading stock exemption. However, the BOT concluded there was no compelling reason to do so.

Assuming the recommendation is accepted, this means that crypto assets can be treated as trading stock for SMSFs and the corresponding loss of the CGT discount. However, it does not stop crypto assets from being on capital account, and eligible for the CGT discount, if, for example, the SMSF has a long term buy and hold strategy.

For further information please contact:

Phil Broderick
Principal
T +61 3 9611 0163 l M +61 419 512 801
E pbroderick@sladen.com.au

Philippa Briglia
Special Counsel
T +61 3 9611 0174 | M +61 449 404 801
E: pbriglia@sladen.com.au