Australia treats crypto under the capital gains tax rules, and two features define how a holder is taxed. First, every disposal is a CGT event — not just selling crypto for dollars, but swapping one token for another and even using crypto to buy goods. Second, an individual who holds an asset for longer than 12 months before disposing of it receives a 50% CGT discount on the gain. Together these set the whole rhythm of crypto tax in Australia: count every disposal, and watch the 12-month clock on every parcel.
Every disposal is a CGT event
A CGT event happens whenever a holder disposes of a crypto asset, and the definition of disposal is broad:
- Selling crypto for fiat is a disposal.
- Swapping one token for another is a disposal of the first token — a crypto-to-crypto trade is two events, not a neutral exchange.
- Using crypto to buy goods or services is a disposal of the crypto at its market value at that moment.
The consequence is that an active wallet generates far more taxable events than a holder expects. A year of swaps across tokens is a year of CGT events, each with its own proceeds, cost base, and gain or loss — even where no Australian dollars were ever involved. There is no de minimis pass for small swaps; each one is computed.
The 50% discount and the 12-month clock
The counterweight is generous. An individual who holds a CGT asset for more than 12 months before the disposal discounts the resulting capital gain by 50% — only half the gain is assessable. For a complying superannuation fund the discount is one third rather than a half. A holding period of twelve months or less gets no discount; the full gain is assessable.
This turns the holding period into a planning variable. A parcel sold at eleven months is taxed on its whole gain; the same parcel sold a few weeks later, past the twelve-month mark, is taxed on half. The clock runs per parcel — each acquisition has its own start date — so two lots of the same token bought a month apart can sit on opposite sides of the discount boundary at the same moment.
That is where specific identification earns its keep. Australia permits a holder to identify which parcels are being disposed of, and it is usually advantageous to choose deliberately rather than default. A holder can select the parcels that have crossed the 12-month line to capture the discount, or select higher-cost-base parcels to reduce the raw gain — the right choice depends on the position. HQ Wealth tracks the 12-month clock on every parcel and uses specific identification at disposal, so eligible parcels are matched to the discount and the gain is computed parcel by parcel rather than from a blended average.
Franking credits on dividends
For a holder whose portfolio also includes shares, Australia's dividend system adds its own mechanics. A franked dividend from an Australian company carries a franking credit for tax already paid at the company level. The shareholder grosses up the dividend by the attached credit, declares the larger figure, and then offsets the franking credit against the tax payable — avoiding double taxation of company profits.
Foreign shares carry no franking. A dividend from an overseas company brings no franking credit, so there is no gross-up and no offset; it is taxed without that relief, subject to any foreign tax considerations. A mixed portfolio therefore has two different dividend treatments running side by side.
Reporting, thresholds, and the wider system
Individuals report through myTax. The relevant places on the return are:
- The CGT schedule and Item 18 (capital gains), where the net capital gain after the discount is reported.
- Item 11 (dividends), where franked and unfranked amounts and the franking credits are declared.
A few fixed points frame the rest of the system:
- The tax year runs 1 July to 30 June, not the calendar year — disposals are gathered into that window.
- The tax-free threshold is A$18,200; income below it is untaxed, with marginal rates above.
- Superannuation contributions come in two kinds — concessional (before-tax, capped) and non-concessional (after-tax, capped) — each with its own treatment.
- GST is 10%, a consumption tax separate from the CGT that applies to disposals.
None of this replaces advice on a specific situation; parcel selection, the discount, and the franking interaction can move a result materially, and a holder with significant activity is well served by confirming the treatment with a professional. HQ Wealth produces an Australian tax pack from the same records — applying the 50% discount to eligible parcels, carrying franked and unfranked dividends with their credits, and aligning the figures to the myTax items so the return reflects what actually happened across the year.
Takeaway: In Australia every crypto disposal is a CGT event — including swaps and spending crypto — so the events pile up fast, but holding a parcel past 12 months halves the gain for individuals. Specific identification and a per-parcel 12-month clock are what turn that discount from theory into a lower bill.