If you own a cryptocurrency and it forks (or splits) resulting in you owning 2 coins, there are tax implications you should be aware of. As far as the tax office is concerned you would have acquired a new asset for zero cost. So when you end up selling the new coin, the profit will be added to your taxable income for the year. Because you acquired the new coin for $0 this means that 100% of the proceeds will be added to your taxable income. If you do not sell the new coin, you do not pay tax on it. If you sell the new coin 1 year or more after acquiring it, you will be entitled to the capital gains discount which means the following…
- for individuals – only 50% of the profit is added to your taxable income.
- for companies – there is no capital gains discount for companies
- for SMSFs – the profit is taxed at 10% instead of the normal 15%.
For more information on how cryptocurrency is taxed in Australia check out this link to the ATO: https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia—specifically-bitcoin/?page=2#Chain_splits