Private ruling: CGT - cryptocurrency
Date of advice: 10 November 2025
Published: 5 January 2026
Ruling period: Income year ended 30 June 20XX

Ruling: Q1: Does the Casascius 10 BTC Silver Round, as acquired by Person A, constitute 2 distinct CGT assets for the purposes of Part 3-1 of the Income Tax Assessment Act 1997 (ITAA 1997) comprising the physical coin and the quantity of bitcoin to which the physical coin relates? | A1: Yes | Q2: Does the acquisition cost of the Casascius 10 BTC Silver Round need to be apportioned between the 2 CGT assets for the purpose of determining the first element of their respective cost base and reduced cost base pursuant to subsection 112-30(1) of the ITAA 1997? | A2: Yes | Q3: Is the physical coin a collectable within the meaning of subsection 108-10(2) of the ITAA 1997? | A3: Yes | Q4: Did CGT event A1 under 104-10 of the ITAA 1997 happen on Person A's disposal of the 10 bitcoin? | A4: Yes | Q5: Was the capital gain made by Person A from the disposal of the 10 bitcoin a discount capital gain under Subdivision 115-A of the ITAA 1997? | A5: Yes

Relevant facts and circumstances: 1. Person A is an Australian resident for tax purposes who has engaged in both investment and trading activities since 20XX. 2. In April 20XX, Person A purchased 5 Casascius 10 BTC Silver Rounds (Silver Rounds) directly from their creator for a total of X bitcoin (including X bitcoin for shipping); or for X bitcoin (X, plus X for shipping) per Silver Round. 3. This equates to $X per Silver Round, calculated as follows: (a) acquisition price per Silver Round (including shipping): X bitcoin (b) bitcoin value on 11 April 20X: $X (c) cost per Silver Round (including shipping): $X (d) ATO average rate for 20XX financial year: X (e) cost per Silver Round: $X. 4. Payment was made by Person A using bitcoin they had already held at the time via transfer to the seller's bitcoin wallet address, as confirmed on the bitcoin blockchain. 5. Each Silver Round is a physical coin you can hold which facilitates access to bitcoins which are intangible assets. Each Silver Round was delivered to Person A in protective capsules and gift boxes, and consists of: • X troy ounce of X fine silver with a Xmm diameter; • a tamper-evident holographic sticker concealing a paper-printed private key corresponding to X bitcoin; and • a unique serial number comprising the initial characters of the corresponding bitcoin address, enabling blockchain verification of the Silver Round's status and bitcoin balance without peeling the holographic sticker. 6. When acquired, each Silver Round bears all the necessary information to access and transfer the X bitcoin linked to its corresponding blockchain address, albeit the private key is hidden beneath the holographic sticker. 7. The Silver Rounds bear distinctive artistic features and were described online by their creator as collectibles. 8. Person A submits that: • the Casascius series created between 20XX and 20XX represent historically significant bitcoin collectibles comprising various denominations, materials and designs, including brass coins, silver rounds and gold-plated variants; • the Casascius series is widely recognised within cryptocurrency and numismatic communities for historical significance, symbolic design and limited production (production having ceased in 20XX); and • coins from the Casascius series have been graded by Professional Casascius Grading Service, auctioned internationally, and collected by institutions such as the British Museum. 9. Person A further submits that: • the X Silver Rounds he acquired were not part of any investment holdings or strategies; he didn't track their value, set target allocations for them or undertake any rebalancing in relation to them; and • the primary motivation for his acquisition of the X Silver Rounds was numismatic enjoyment and personal collection based on their artistic design, symbolic significance and collectible nature. 10. At no point have any of the X Silver Rounds acquired by Person A been used in business operations or public exhibitions; loaned, mortgaged, pledged or used as security for any financial arrangement. 11. On 15 December 20XX, Person A peeled back the holographic sticker to uncover the embedded private key which controlled the X bitcoin associated with one Silver Round. 12. He then transferred the X bitcoin to an account with a digital currency exchange provider in Australia, from which they were transferred across multiple market transactions between X December 20XX and 30 December 20XX for a total of approximately $X. 13. At the time of transferring the bitcoin to a central exchange, the market value of the X bitcoin was $X, calculated as follows: (a) bitcoin price on X December 20XX: $X (b) value of X bitcoin: $X (c) ATO average rate for December 20XX: X (d) value of X bitcoin: approximately $X. 14. Person A's decision to sell the X embedded bitcoin was driven by their financial circumstances at the time. That is: • in late 20XX, they and their spouse acquired property and developed dwellings on it with a view to residing in one and disposing the other to repay the bank loans used to finance a majority of the land purchase and construction costs; • due to changed family circumstances, both dwellings were ultimately occupied by members of Person A's family, and neither dwelling was disposed of, removing an expected source of capital to reduce their debt; and • interest costs on the home loans had risen due to interest rate increases, which coincided with the birth of their second child and a reduction of household income as Person A's spouse was on maternity leave. 15. The proceeds from the sale of the X bitcoin were deposited into their mortgage offset accounts so as to reduce interest payments and maintain flexibility to access the funds if needed. A portion of the proceeds has also been set aside as a provision for any capital gains tax liability arising in connection with the disposal. 16. Person A submits that the decision to access and sell the X embedded bitcoin rather than sell the intact Silver Round meant that he voluntarily accepted a lower overall value by foregoing the premium typically attached to intact Silver Rounds, but was done so based on practical considerations, namely: • selling the intact Silver Round would have involved significant risk in arranging secure transport; • no ready market is identifiable in Australia for high value coins (making it difficult to locate trustworthy buyers); and • accessing the bitcoin enabled safe and certain value realisation through an established, regulated digital currency exchange provider in Australia. 17. Person A continues to hold the Silver Round associated with the spent bitcoin and, at the time of this ruling, has no plans to dispose of it. They think it may have 'some value' as a collectible artifact. 18. Person A continues to hold the other X Silver Rounds as acquired and, at the time of this ruling, has no immediate plans of disposing them or using the bitcoin associated with them.

Relevant legislative provisions: Income Tax Assessment Act 1997 Part 3-1 | Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 104-10(1) | Income Tax Assessment Act 1997 subsection 104-10(2) | Income Tax Assessment Act 1997 subsection 104-10(4) | Income Tax Assessment Act 1997 subsection 108-5(1) | Income Tax Assessment Act 1997 subsection 108-10(2) | Income Tax Assessment Act 1997 paragraph 108-20(2)(a) | Income Tax Assessment Act 1997 subsection 110-25(2) | Income Tax Assessment Act 1997 subsection 110-55(2) | Income Tax Assessment Act 1997 Subdivision 112-A | Income Tax Assessment Act 1997 subsection 112-30(1) | Income Tax Assessment Act 1997 Subdivision 115-A | Income Tax Assessment Act 1997 section 115-5 | Income Tax Assessment Act 1997 section 115-10 | Income Tax Assessment Act 1997 section 115-15 | Income Tax Assessment Act 1997 section 115-20 | Income Tax Assessment Act 1997 section 115-25

Reasons for decision: Summary: The Silver Round, as acquired by Person A, constitutes 2 distinct CGT assets for the purposes of Part 3-1 comprising the physical coin and the quantity of bitcoin to which the physical coin relates. | Detailed Reasoning - Detailed reasoning: The essential feature of a paper wallet is a physical (offline) record of a bitcoin private key together with its corresponding public address. The record enables the holder to control bitcoin recorded on the blockchain without the private key ever being stored or transmitted in an online environment. This is precisely what the Silver Round provides; in substance it is a 'paper wallet' contained within a physical coin. Under the tamper-evident holographic sticker is a printed private key, which is the only means of accessing the bitcoin associated with the Silver Round. Possession of the Silver Round means possession of the concealed private key, making it functionally equivalent to a paper wallet. The silver casing and security features add aesthetic appeal and collectible value, but do not change the fundamental nature and purpose of the thing. The additional elements such as the metal body, holographic seal and branding are ancillary. It is an offline printed keypair. The term 'CGT asset' is defined in subsection 108-5(1) as any kind of property, or a legal or equitable right that is not property. The Commissioner confirms in Taxation Determination TD 2014/26 that bitcoin is a CGT asset for the purposes of subsection 108-5(1). In doing so, TD 2014/26 explains (at paragraph 8) that, in the case of bitcoin, the relevant relationship in the nature of property that must be considered is the relationship between: • the object or thing, bitcoin, being the digital representation of value constituted by 3 interconnected pieces of information (a bitcoin address; the bitcoin holding or balance in that address; and the public and private keypair associated with that address); and • the bundle of rights (referred to in TD 2014/26 as 'Bitcoin holding rights') ascribed to a person with access to the bitcoin under the bitcoin software and by the community of bitcoin users. The Silver Round conferred on Person A the bitcoin address, a balance of bitcoin recorded against that address, and the public and private keypair. Given Person A's possession of this information, it was Person A who held the Bitcoin holding rights. The fact that the holographic sticker had to be peeled back to read this information is not considered relevant, nor is the act of peeling which has no legal significance. Person A therefore had a property interest in 10 bitcoin for every Silver Round owned. Bitcoin is an intangible asset. To the extent that the Silver Round is tangible, it constitutes a separate item of property; that is, a second CGT asset. | Summary: The acquisition cost of the Silver Round needs to be apportioned between the 2 CGT assets for the purpose of determining the first element of their respective cost base and reduced cost base pursuant to subsection 112-30(1). | Detailed Reasoning - Detailed reasoning: Under the general cost base and reduced cost base rules, the first element of the cost base and reduced cost base pursuant to subsections 110-25(2) and 110-55(2) respectively is the total of: (a) the money you paid, or are required to pay, in respect of acquiring it; and (b) the market value of any other property you gave, or are required to give, in respect of acquiring it (worked out as at the time of the acquisition). Subdivision 112-A contains provisions setting out situations that may result in a modification to the general rules. Specifically, subsection 112-30(1) sets out an apportionment rule relating to the acquisition of an asset and provides: If you acquire a CGT asset because of a transaction and only part of the expenditure you incurred under the transaction relates to the acquisition of the asset, the first element of your cost base and reduced cost base of the asset is that part of the expenditure that is reasonably attributable to the acquisition of the asset. Person A did not give any money in respect of the acquisition of the Silver Rounds but gave property in the form of bitcoin to acquire them. The market value of that property, worked out at the time of the acquisition, was $108.54 per Silver Round. Given the Silver Rounds constitute 2 distinct CGT assets (as confirmed in response to question 1 of this ruling), only part of the expenditure incurred by Person A relates to the acquisition of each asset and the first element of his cost base and reduced cost base of each of the relevant CGT assets is (in accordance with subsection 112-30(1)) that part of the expenditure that is reasonably attributable to the acquisition of each asset. | Summary: The physical coin is a collectable within the meaning of subsection 108-10(2). | Detailed Reasoning - Detailed reasoning: Subsection 108-10(2) defines a collectable as: (a) artwork, jewellery, an antique, or a coin or medallion; or (b) a rare folio, manuscript or book; or (c) a postage stamp or first day cover; that is used or kept mainly for your (or your associate's) personal use or enjoyment. The requirement that an asset be used or kept mainly for the personal use or enjoyment of the taxpayer (or their associate) is an element shared with the first sub-definition of a 'personal use asset' at paragraph 108-20(2)(a). The words 'personal use' in the definition of personal use asset are used in contradistinction to 'use for business or profit-making purposes' ( Favaro v FC of T 96 ATC 4975 ) . The word 'contradistinction' means distinction by contrast or opposition. Therefore, an asset that is not used for business or profit-making purposes is, by default, used or kept mainly for personal use and enjoyment. The 2 categories are mutually exclusive. The physical coin, comprised of 1 troy ounce of .999 fine silver and bearing distinctive artistic features, qualifies as a 'coin' within the ordinary meaning of that term. The physical coins acquired by Person A are considered to have been used or kept mainly for Person A 's personal use or enjoyment on the basis that: • they served a functional purpose similar to 'paper wallets'; • Person A was attracted by the physical coins' design, symbolism and collectible nature; • the physical coins, as opposed to the associated bitcoin, have never been used for business or any other income-producing purposes, nor for public exhibition or as security; and • Person A has held each of the physical coins for a period of greater than 13 years and, at the time of this ruling, has no plans to dispose them. | Summary: CGT event A1 under 104-10 happened on Person A 's disposal of the 10 bitcoin. | Detailed Reasoning - Detailed reasoning: Subsection 104-10(1) provides that CGT event A1 happens if you dispose of a CGT asset. Subsection 104-10(2) explains that you dispose of a CGT asset if a change of ownership occurs from you to another entity. However, a change of ownership does not occur if you stop being the legal owner of the asset but continue to be its beneficial owner. Person A transferred legal ownership of the bitcoin when he moved them to a centralised exchange. However, CGT event A1 would not have occurred if he retained beneficial ownership, which depends on whether the terms of the exchange created a trust relationship. If Person A did retain beneficial ownership, CGT event A1 would instead occur at the later times when those bitcoin were sold between 15 December 20XX and 30 December 20XX. Pursuant to subsection 104-10(4), Person A made a capital gain from that event to the extent the capital proceeds from the disposal were more than the asset's cost base. | Summary: The capital gain made by Person A from the disposal of the 10 bitcoin was a discount capital gain under Subdivision 115-A. | Detailed Reasoning - Detailed reasoning: Section 115-5 provides as follows: A discount capital gain is a capital gain that meets the requirements of sections 115-10, 115-15,115-20and115-25. The capital gain made by Person A from the disposal of the 10 bitcoin was a discount capital gain under section 115-5 as: • for the purposes of section 115-10, the capital gain was made by Person A, an individual; • for the purposes of section 115-15, the capital gain resulted from a CGT event which happened after 21 September 1999; • for the purposes of section 115-20, the capital gain was worked out using a cost base calculated without reference to indexation; and • for the purposes of section 115-25, the capital gain resulted from a CGT event happening to a CGT asset that was acquired by Person A at least 12 months before the CGT event.

Reasons for decision: All subsequent legislative references are to the ITAA 1997.