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Edited version of private advice
Authorisation Number: 1052391269360
Date of advice: 8 May 2025
Ruling
Subject: CGT - transfer of crypto currency
Question
Will CGT event A1 happen in accordance with section 104-10 of the Income Tax Assessment Act 1997, when you transfer XXXX tokens to the company under the arrangement described in the Loan Agreement?
Answer
No, CGT event A1 will not happen when you transfer XXXX tokens to the company under the arrangement described in the Loan Agreement as there will be no change in the beneficial owner.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
20XX
Relevant facts and circumstances
1. You are the sole director and shareholder of a company.
2. You personally hold crypto currency assets.
3. You and the company will be parties to an arrangement described as a Loan Agreement (Loan Agreement), under which you agree to transfer XXXX tokens (Loan Amount) to the Company's XXXX wallet address. You have control of this wallet address.
4. The company will use the Loan Amount solely for the purpose of operating validating accounts on the XXXX network using its computer servers.
5. Under the Loan Agreement the company will transfer the entire Loan Amount of XXXX tokens back to your XXXX wallet address when the validating accounts are closed at the end of the term of the Loan Agreement.
6. No interest will accrue on the Loan Amount, except as provided for in the Loan Agreement.
7. Under the Loan Agreement, the company will stake the Loan Amount in the XXXX XXXX Chain staking contract, with the withdrawal address specified as an XXXX address the company owns and controls. The company will retain most of the revenue generated from staking the Loan Amount and a portion will be transferred to your XXXX wallet address.
8. Under the Loan Agreement you will retain management and control of the private keys to the validating accounts established with the Loan Amount.
9. Any profit or loss derived from staking the XXXX tokens will be the profit or loss of the company.
Relevant legislative provisions
Income Tax Assessment Act Section 102-20
Income Tax Assessment Act Section 104-10
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