Crypto as a personal use asset

Work out if your crypto asset is a personal use asset and when a personal use crypto asset is exempt from CGT.

On this page

• What is a personal use asset?
• Using crypto to buy items for personal use or consumption
• When crypto is not a personal use asset

What is a personal use asset?

A crypto asset is a personal use asset if you keep or use it mainly for personal use. The most common situation of personal use of crypto assets is to buy items for personal use or consumption.

This page relates only to traditional cryptocurrencies (such as Bitcoin). See Non-fungible tokens for information on their use as personal use assets.

The relevant time for determining if a crypto asset is a personal use asset is when you dispose of it:

• A crypto asset you acquire and use in a short period of time to buy items for personal use or consumption is more likely to be a personal use asset.
• A crypto asset you acquire and hold for some time before you use it, or only use a small proportion of it, to buy items for personal use or consumption is less likely to be a personal use asset.

During a period of ownership, the way you keep or use a crypto asset may change. For example, you may originally acquire a crypto asset to buy items for personal use and enjoyment, but ultimately keep it as an investment or use it in carrying on a business. It is the main use, that you determine when you dispose of a crypto asset, that dictates whether a crypto asset is a personal use asset.

Using crypto to buy items for personal use or consumption

A capital gain on the disposal of a crypto asset is disregarded if both:

• it is a personal use asset
• you acquire it for less than $10,000.

A capital gain on a personal use asset is not disregarded if it cost you more than $10,000 to acquire the asset.

You disregard all capital losses you make on personal use assets, including crypto assets, for CGT purposes. That is, you don't take that loss into account when calculating a net capital gain for the income year. You also can't carry it forward as a capital loss to use in future income years.

When crypto is not a personal use asset

Crypto assets are not personal use assets when you keep or use them:

• as an investment
• in a profit-making scheme
• in carrying on a business.

Except in rare situations, a crypto asset is not a personal use asset if you:

• have to exchange your crypto asset for Australian dollars (or for a different crypto asset) to buy items for personal use or consumption
• use a payment gateway or other bill payment intermediary to acquire the items on your behalf (rather than acquiring them directly with your crypto assets).