Private ruling: Cryptocurrency
Date of advice: 12 November 2025
Published: 5 January 2026
Date scheme commenced: DD MM YYYY

Ruling: Q1: Is the use of Coin A for everyday purchases and payments via the Company 1 EFTPOS card considered to be a "personal use asset" for the purposes of section 108-20 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. | Q2: Can the Coin A originally acquired from 20YY onwards, and continually added to with the intent of using it as currency, be treated as a personal use asset and therefore not give rise to a CGT event upon disposal? | A2: No, for the Coin A already disposed of, converted to Australian dollars and already used to purchase items via the Company 1 EFTPOS card. As stated previously, based on the objective facts, and given the inherent nature of Coin A, it is considered that the main use of the Coin A you have disposed of, was as a speculative investment. However, as the relevant time for determining if a crypto asset is a personal use asset is when you dispose of it, we cannot make a definitive decision regarding the Coin A you still hold. Nevertheless, taking into account the facts that have already occurred and based on the Commissioner's view as expressed in QC 66954, it is considered unlikely that the Coin A would be determined to be personal use assets when you dispose of it. | Q3: Does the conversion of Coin A to Australian dollars in 20YY and 20YY to prepay education fees, use for a deposit and purchase X vehicles constitute CGT events, or can these transactions also be treated as the disposal for a personal use asset and therefore be exempt from CGT? | A3: No. | Q4: Is the disposal of Coin A for Australian dollars for pre-payment of school fees, a house deposit and the purchase of motor vehicles be considered personal use assets and therefore be exempt from CGT? | A4: No. This private ruling applies for the following periods: Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY The scheme commenced on: DD MM YYYY

Relevant facts and circumstances: You are a resident for tax purposes. You began researching and learning about cryptocurrency in 20YY, and after considering its use as an alternative form of currency, made your first purchase of Coin A in 20YY. You have acquired additional Coin A over the following years with the intent of using it as a medium of exchange (currency) rather than an investment asset. In 20YY, you obtained an EFTPOS card via Company 1 that allows you to use Coin A indirectly for daily purchases. From 20YY to present, you have used this Company 1 card regularly for daily expenses (e.g. groceries, fuel, bills) and has generally only converted or "cashed out" Coin A to AUD when a purchase is imminent. In 20YY, you converted a larger amount of Coin A into AUD in order to prepay X years of school fees: this was a significant one-off transaction and was held in your account as the school wouldn't prepay that far. In 20YY, you covered a larger amount of Coin A into AUD in order to have a house deposit, buy X cars and pay for private school fees - these were significant one-off transactions. You never purchased any Coin A for more than $XX,000 AUD at a time. Coin A has only been converted to AUD when an immediate purchase or expense was planned. Prepayment of Fees/Deposits/Car Purchases were a One-Off Expense. Coin A transactions attached $ Amount cashed out for cars, house and school fees were: • The dollar amounts for the cars were $XX,000 and about $XX,000. • The deposit was $XXX,000. • The amount pulled out for X years of fees for 20YY-20YY was around $XX,000 but there was a buffer amount for fees and other associated costs. You have provided a statement of transactions detailing your Coin A deposits, withdrawals and use via Company 1 from 20YY. How the Company 1 card works • You use the card as you would a normal debit MasterCard, online or in person, and Company 1 takes an amount of Coin A from your account which covers the price at the current AUD value plus a X% fee. • Company 1 is a City Z-founded startup that allows Australians to trade, store, spend and receive Coin A. Founded in 20YY, it's essentially a Coin A exchange and wallet provider - describing itself as a "XXX XXXX XXX". Over its X years of operation, Company 1 has accumulated over XX,000 customers and has processed over $XXX million worth of transactions. • The business has recently commenced trialling a EFTPOS card, which can be topped up with Australian dollars and enables users to use their Company 1 Coin A wallet funds in any store that accepts EFTPOS. • Company 1 Card is a prepaid debit Mastercard. You can only use the cryptocurrency already in your Company 1 account to make purchases. • When you use your Company 1 Card to make a purchase, crypto from your Company 1 account is instantly converted to AUD, loaded onto the card and used to complete the transaction. • Company 1 Card is a fully-featured Mastercard and can be used everywhere that Mastercard is accepted. You can even use it to withdraw cash at the ATM. • Company 1 Card is free to activate and has no monthly fees. There's a X% fee to convert your crypto when you make a purchase, but this is returned to you in the form of Company 1 Rewards points. • You can use any cryptocurrency that you have in your Company 1 account. This includes all of the more than XX cryptos offered by Company 1. • In addition to the usual X% transaction fee, there is also a X.XX% fee charged by Mastercard for any foreign transactions and a $XX.XX fee for any transaction disputes.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 160B(1) | Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 104 | Income Tax Assessment Act 1997 section 104-20 | Income Tax Assessment Act 1997 Subsection 108-5 | Income Tax Assessment Act 1997 section 108-20 | Income Tax Assessment Act 1997 Subsection 108-20(2) | Income Tax Assessment Act 1997 Subsection 110-25(2) | Income Tax Assessment Act 1997 Subsection 116-20(1) | Income Tax Assessment Act 1997 Subsection 118-10(3)

Reasons for decision: Detailed Reasoning - Question 1 and Question 2: Section 108-20 of the Income Tax Assessment Act 1997 (ITAA 1997) states that personal use assets are Capital Gains Tax (CGT) assets, other than collectables, that are used or kept mainly for the personal use or enjoyment of you or your associates. The Commissioner's view of when a crypto asset may be considered a personal use asset is contained on our webpage 'Crypto asset as a personal use asset' which can be found by searching for 'QC 69954' on ato.gov.au. It states: 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, determined at the time when you dispose of a crypto asset, that dictates whether it is a personal use asset. For record keeping purposes, evidence of your original intention at the time you acquired the crypto asset may be relevant but is not determinative of whether your crypto asset is a personal use asset. Instead, you will need to demonstrate how you actually kept or used the crypto asset from the time of acquisition up until the time you disposed of it. It also states: Except in rare situations, a crypto asset is not a personal use asset if you: • exchange your crypto asset for Australian dollars (or for a different crypto asset) to buy items for personal use or consumption. Taxation Determination TD 2014/26 Income tax: is cryptocurrency a 'CGT asset' for the purposes of subsection 108-5(1) of the Income Tax Assessment Act 1997? states: The inherent nature of crypto means that it is generally either used as a means of exchanging it for something of value, or it is kept as a speculative investment. | Detailed Reasoning - Cryptocurrency: Generally, cryptocurrency is only capable of being acquired, held and transacted with. Both the period of holding and the nature of the subsequent transaction will be relevant to whether your cryptocurrency is a personal use asset. The relevant time for determining whether or not an intangible asset is a personal use asset is at the time of its disposal. | Detailed Reasoning - Personal use assets: Section 108-20 of the Income Tax Assessment Act 1997 (TAA 1997) says that personal use assets are Capital Gains Tax (CGT) assets, other than collectables, that are used or kept mainly for the personal use or enjoyment of you or your associates. Subsection 108-20(2)(b) of the ITAA 1997 says that a personal use asset can include an option or right to purchase a CGT asset of that kind -meaning a right to purchase a personal use asset. When the CGT provisions of the Income Tax Assessment Act 1936 (ITAA 1936) were enacted, the following kinds of property were given as being examples of personal use assets - clothing, white goods, furniture, sporting equipment, cameras and boats. | Detailed Reasoning - Mainly used or kept: The Australian Taxation Office Interpretive decision ATO ID 2002/795 - Are unused marble floor tiles 'personal use assets' as defined in subsection 108-20(2) of the Income Tax Assessment Act 1997 (ITAA 1997)? states it does not matter if the assets are actually used for the purpose for which they had acquired, it is the intent of the purchase and the purpose for which an asset is mainly kept that is key to if an asset is a "personal use" asset. The definition of mainly is predominantly, chiefly, principally, or for the most part (ATO ID 2002/795). ATO ID 2011/37- Income Tax CGT small business concessions: maximum net asset value test - disregarded assets - asset being usedsolely for personal use and enjoyment explains that the entire ownership period is taken into account and if regard was had only to an asset's use at a single point in time, the result would not necessarily reflect the true nature of the use of the asset. | Detailed Reasoning - Personal use or Enjoyment: An asset has to provide an individual with a source of pleasure or relate directly to that individual to be a "personal use" asset. An asset cannot be a personal use asset if it is mainly acquired, kept or used as an investment, as part of a business or for a profit-making purpose. The two categories are mutually exclusive. Where an individual keeps cryptocurrency for a number of years with the intention of selling them at opportune times based on favourable rates of exchange this is not personal use. TD 2014/26 Income tax: is cryptocurrency a 'CGT asset' for the purposes of subsection108-5(1 ) of the Income Tax Assessment Act 1997? confirms that cryptocurrency that is kept or used mainly to make purchases of items for personal use or consumption ordinarily will be kept or used mainly for personal use. However, if the cryptocurrency were instead purchased to facilitate the purchase of income producing income producing investments, they would not be personal use assets. ITAA 1997 does not provide a definition of investment, however, generally it's the allocation of a resource (money) in the expectation of some benefit in the future. In Favaro's case ( Favaro v FC of T 96 ATC 4975), Italian currency, which was converted to Australian currency and invested, was held not to be a personal use asset (under section 160B(1) of the Income Tax Assessment Act 1936 (ITAA 1936)). In this case a significant portion of the currency was seen to be invested. It was held that the purpose of holding the currency was that it was to be exchanged for Australian currency at a favourable rate and therefore was not personal use. | Detailed Reasoning - Intangible Assets: The definition of personal use includes the right or option of the Taxpayer to acquire a CGT asset that would be a personal use asset. In most cases, an intangible asset would not be considered to be a personal use asset. An exception to this may be where an intangible asset is used to directly acquire an asset held mainly for personal use and enjoyment. That is, the intangible asset can take on the character of another asset. For example, where you are provided an option to purchase a boat for personal use; the option would itself be an intangible personal use asset. TD 2014/26 states where an individual taxpayer purchased cryptocurrency from a cryptocurrency exchange and uses the cryptocurrency to make online purchases for their personal needs, for example clothing or music, that would be considered to be a personal use asset. | Detailed Reasoning - Investment: TD 2014/26 goes on to say that cryptocurrency that is kept or used mainly for the purpose of profit-making or investment, or to facilitate purchases or sales in the course of carrying on business is not used or kept mainly for personal use. Further, the inherent nature of cryptocurrency means that it is generally either used as a means of exchanging it for something of value, or it is kept as a speculative investment. | Detailed Reasoning - Disposal: We take into account the nature of the property acquired when the cryptocurrency is disposed of (for example, whether the cryptocurrency is used to purchase an investment) when considering if cryptocurrency is a personal use asset (TD 2014/26). If you have to exchange a cryptocurrency you own to Australian dollars (or to a different cryptocurrency) to purchase or acquire the items for personal use or consumption, then this strongly indicates the cryptocurrency you own was acquired, held and used for a purpose other than personal use or enjoyment. Therefore, when we consider personal use of an asset, we consider the following aspects:- • the initial intention, • the use and intention during the period owned, • the length of time the asset was owned, and • the subsequent disposal. | Detailed Reasoning - Your circumstances: In your case, you did not use your Coin A as a means of exchange to directly pay for personal expenditure. You made your purchases via your Company 1 Mastercard. In the process of using your Company 1 Mastercard, you used it as intermediary mechanism to exchange a portion of your available Coin A at the time of purchase for Australian dollars. It is the exchanged Australian dollars and not the Coin A that was used directly for the ultimate purchase of the personal items and expenditure. As per ATO ID 2011/37, it is 'entire ownership period is taken into account' when determining if an asset has been used for personal use. You have deposited and held your Coin A over several years during which its value increased substantially. Objectively, it is considered that the main use of your Coin A has been as a speculative investment. Therefore, the Coin A you have disposed of were not for personal use. The period of ownership of the Coin A has been since 20YY. The value of Coin A over the time has increased substantially over the period of ownership prior to the final exchange for Australian dollars. When taking into account, the period of effective ownership of the Coin A prior to exchange/disposal, the quantity involved and the fact the Coin A was not used directly means it would not be considered a personal use. We note that you also stated that you do not consider the Coin A to be an investment. However, it is common that a speculative investment is held for long periods rather than being dealt with or traded on a short-term basis. As stated previously, based on the objective facts, and given the inherent nature of Coin A, it is considered that the main use of the Coin A you have disposed of, was as a speculative investment. As the relevant time for determining if a crypto asset is a personal use asset is when you dispose of it, we cannot make a definitive decision regarding the crypto you still hold. However, taking into account the facts that have already occurred and based on the Commissioner's view as expressed in QC 66954, it is considered unlikely that the crypto would be determined to be personal use assets when you dispose of it. | Detailed Reasoning - Disposal of Cryptocurrency - Question 3: Section 102-20 of the ITAA 1997 provides that you can only make a capital gain or a capital loss if a CGT event happens. Division 104 sets out the CGT events. Subsection 104-10(1) of the ITAA 1997 states that CGT event A1 happens if you dispose of a CGT asset. Subsection 104-10(2) of the ITAA 1997 provides that you dispose of a CGT asset if a change in ownership occurs from you to another entity, whether because of some act or event or by operation of law. Paragraph 15 of Taxation Determination 2014/26 Income tax: is cryptocurrency a 'CGT asset' for the purposes of subsection 108-5(1) of the ITAA 1997? explains: the disposal of cryptocurrency to a third party gives rise to CGT event A1 under subsection 104-10(1). A taxpayer will make a capital gain from CGT event A1 if the capital proceeds from the disposal of the cryptocurrency are more than the cryptocurrency's cost base. The capital proceeds from the disposal of the cryptocurrency are, in accordance with subsection 116-20(1), the money or the market value of any other property received (or entitled to be received) by the taxpayer in respect of the disposal. The money paid or the market value of any other property the taxpayer gave in respect of acquiring the cryptocurrency will be included in the cost base of the cryptocurrency in accordance with subsection 110-25(2). | Detailed Reasoning - Your circumstances: Every transaction (whether crypto - crypto, crypto- FIAT (legal tender) or FIAT - crypto) results in a CGT event which will reflect either a gain or a loss. The exchange of the Coin A for Australian dollars via the Company 1 EFTPOS Card in the process of paying for X vehicles, a deposit and payment of fees would constitute CGT A1 events at the time the exchange was made from Coin A to Australia dollars. This is because it taken the Coin A was disposed of every time you made the exchange in order to facilitate the payment. It was not the Coin A that was exchanged directly, but the Australian dollars that resulted from the Coin A's ultimate disposal. The capital proceeds from the disposal of the Coin A are, in accordance with subsection 116-20(1) of the ITAA 1997, will be the money or the market value of any other property received (or entitled to be received) by you in respect of the disposal. The money paid or the market value of any other property you gave in respect of acquiring Coin A will be included in the cost base of the Coin A in accordance with subsection 110-25(2) of the ITAA 1997. | Detailed Reasoning - Question 4: The Coin A exchanged for Australian dollars for the purpose of personal consumption would not be considered for personal use as previously mentioned. Therefore, any exchange for Australian dollars would give rise to CGT event A1 under subsection 104-10(1) of the ITAA 1997. The capital proceeds from the disposal of the Coin A would be, in accordance with subsection 116-20(1) of the ITAA 1997 and not disregarded under subsection 118-10(3) of the ITAA 1997, a capital gain made from a personal use asset.