On Feb 26, 2022 we hosted a free crypto tax & asset protection event where our specialists shared how to protect your cryptos from unlawful taxes.


    – Now is the time to protect your assets while it’s easy. Would you rather be in control of your wealth, assets and financial decisions … or leave it in the hands of others, a socialist system and governments?

    – There’s three (3) ways the ATO views cryptocurrencies (Personal, Trading and Investment) with unique tax implications and exemptions for each holding. Your situation will determine the best tax structure to use.

    – Michaela explains it’s not beneficial to hold cryptos as an individual because you’re not only potentially taxed at the highest margin rate (maximum 47%) but you’re exposed to asset protection liabilities.

    – Companies are taxed at a maximum of 25% but Michaela and Warren’s opinion is it’s not the best structure to use for cryptos in general due to asset protection reasons.

    – Using a trust is Michaela, Virna and Warren’s preferred structure for cryptocurrencies. This involves a deed and declaration to say you hold the crypto assets on behalf of the trust. Gains are taxed in the hands of beneficiaries so you may consider a corporate beneficiary (such as a bucket company).

    – Circumstances are always different so this information cannot be relied upon as financial or tax advice. You should always seek specialist advice as your personal situation will determine the best tax structure.

How To Keep Your Cryptocurrencies Safe From the ATO:

what is a taxable event cryptocurrency

1. Make Sure Your Accounting And Reports Are Up To Date

One of the biggest myths in cryptocurrencies is that taxes are avoidable due to the decentralised, private and “alternative to fiat” system. This is incorrect.

Michaela Rankin, a chartered accountant, tax specialist and business advisory with 11 years of experience in cryptocurrencies, shared in her crypto taxes presentation that the ATO require records of every single transaction.

That is, every transaction or conversion, that’s considered taxable and therefore you need documentation of what you paid for and the resulting amount.

What is a taxable event in cryptocurrency?

Michaela and Virna explained that a taxable event in cryptocurrency occurs when you dispose of your cryptos. That is, coin-coin or coin-fiat transactions are viewed as a taxable event by the ATO and therefore subject to capital gains tax.

For example, if you exchange BTC for ETH, then 2 months later ETH to MATIC, and 1 week later MATIC to fiat … each transaction in this scenario is considered a taxable event and therefore must be recorded accurately.

Is sending cryptos between wallets taxable?

Wallet-wallet is not considered a taxable event by the ATO. That is, if you move BTC from MetaMask to Ledger, this is not taxable as it’s a transfer, not a transaction.

Are DeFi transactions taxed?

Unfortunately, DeFi, yield farming, liquidity mining, staking and grid / bot trading investors aren’t spared from taxes or tracking despite the inordinate amount of transactions that take place.

This can be cumbersome but you need to be diligent with your records, regularly download your data or keep accurate spreadsheets of these types of transactions because the ATO deems this as ordinary income, as mentioned by Michaela Rankin.

Virna White mentioned Koinly is a popular tracker amongst her clients for this purpose but any decent crypto tax calculator will suffice if the data can be recorded accurately.

Is wrapping crypto tokens taxable?

Wrapping crypto tokens is not considered a taxable event by the ATO as it’s a “like-for-like” trade and the value remains the same when wrapping in cryptocurrencies.

Are airdrops considered taxable?

Yes airdrops in cryptocurrencies are considered taxable events and seen as ordinary income, and therefore subject to income tax, not CGT. This is similar to claiming your staking rewards.

How can I avoid paying taxes on cryptos in Australia?

There are creative strategies and tax structures you can use to legally avoid paying taxes on cryptos. This would involve setting up the right tax structure and knowing the exemptions that apply to certain situations, which our specialists discuss through this event.

Featured: ATO Laws, Structures & Slashing Your Taxes In Cryptos

2. Sort Out Your Crypto Tax Structures

are airdrops considered taxable

The ATO and FED have declared war on crypto investors as Warren shows in his presentation. Unfortunately, they’ll win against most investors or traders in this space due to terrible structuring, accounting and understanding of the crypto tax laws.

If you’re not keeping up to date with your tax reports, or if fiat “suddenly” shows up in your bank account, you’ll be on their radar as Warren discusses in session 2.

Warren further demonstrates the cost of NOT tax planning:


    Kris buys $40,000 of Bitcoin at $10,000 USD in June 2020.

    He sells when it hits $55,000 USD in March 2021.

    He spent $40,000, got $220,000, profit $180,000 USD.

    Sounds good EXCEPT with no structuring, Kris will pay taxes at the highest individual marginal tax rates of 40-45%, i.e. $75-80,000 USD taxes. Ouch!


    If we’d put Kris in a family trust or bucket company, he’d pay a maximum of 25% tax. Plus the timing makes a difference, e.g. if he waited until July 2021, he cuts his tax bill by 50%.

    $30-35,000 USD tax saving.

The moral of the story is keeping wealth is just as important as making it!

Once you’ve derived the gains, it’s nearly impossible to avoid paying that tax. Furthermore, you’ll just be chasing your tail at that point by catching up on all the reports.

By contrast, if you set yourself up right from the beginning, it’s far easier, you can legally slash your taxes to as low as 25% and you gain stronger asset protection, which Warren, Michaela and Virna briefly discuss at this event.

Depending upon your personal circumstance, you may consider holding in your own name, trust, company or SMSF but always seek professional advice.

    If you’d like to get in contact with Michaela Rankin to help with you accounting, tax planning or advisory, as June is just around the corner, send an email to support@globalwealthclub.com and we’ll put you in contact.

3. It’s Not Too Late To Restructure Yourself

crypto tax structures

The good news is that it’s not too late to restructure yourself if you already own cryptocurrencies in your name. You will, however, have to pay tax on the transfer as Virna explains.

You have 2 situations when you set up the structure:

1. BEFORE you buy the cryptos. This is ideal

2. AFTER you buy the cryptos. It’s not too late to restructure yourself correctly.

Within situation 2 … we can break this down further.

2a. You hold or trade cryptos in your own name which haven’t gone up in value much.

That’s the best time to consider moving them into a structure.

2b. You hold or trade cryptos are in your own name which has made you a lot of profits. What can be done in this situation?

Short answer is yes but not a lot can be done about the immediate tax required.

There’s 2 matters to consider for crypto taxes and asset protection. The first is how you structure yourself for the future and the second is dealing with the sins of the past, as I call it.

Jesus can forgive sins but unfortunately the ATO aren’t quite so forgiving.

Meaning, if you’ve already made a substantial amount of profits, you could be faced with a large bill. However, restructuring yourself will minimise your future gains and taxes.

Whichever situation you’re in, you should always seek professional advice.

If you’re looking for guidance on your situation, book a free 30 minute consultation with our team to see how we can assist you with tax minimisation, asset protection and sovereignty.

    Disclaimer: As we are NOT licensed financial advisors, on financial and investment matters, the information is provided for educational purposes only. It should not be relied upon as financial product advice. None of the information takes into account your personal objectives, financial situation or needs. You must make your own decision how to proceed. If you want financial product advice that takes account of your particular objectives, financial situation or needs, please seek financial advice from a licensed financial advisor before making any financial decision.