Key Crypto Tax Considerations for Returning Residents

As cryptocurrency continues to reshape global finance, Australian investors returning home face a unique set of tax challenges. When you resume Australian tax residency, all worldwide assets, including crypto, become subject to Australian tax rules. The ATO treats cryptocurrency as property (a CGT asset) or trading stock, depending on whether you’re classified as an Investor or a Trader.

This article outlines key crypto tax considerations for returning residents, including capital gains, deemed acquisition rules, and foreign tax offsets. Crypto Investors are subject to CGT on disposals such as selling, swapping, or gifting crypto, with a potential 50% discount if assets were held for over 12 months.

Whether you’re relocating individually or managing a global team, understanding these rules is essential for compliance and strategic planning.

The Application of Deemed Acquisition Rules

When you become an Australian resident for tax purposes, you trigger a reset of your cost bases for many assets. You are taken to have acquired your CGT assets at the same time, for their market value at that time. This is called ‘deemed acquisition’.

Deemed acquisition does not apply to assets:

• Acquired before CGT started on 20 September 1985.
  
• That are taxable Australian property, such as real estate in Australia and assets used to carry on a business in Australia – the general cost base rules apply to taxable Australian property.

For many expatriates (Australian residents who have been living abroad) holding cryptocurrency at the time of returning to Australia, the asset’s cost base is recalculated based on its current market value when Australian residency is re-established. Any pre-residency gains are excluded from Australian tax.

Example: If you return to Australia on 1 July 2025, your crypto holdings are treated as if purchased at the 1 July 2025 market price for Australian CGT purposes. This deemed acquisition ensures that only future appreciation (from your date of return onward) will be subject to Australian capital gains tax upon disposal.

Crypto Tax Implications of Deemed Disposal

This position applies provided that, at the time Australian residents departed and ceased their Australian tax residency, they chose to opt out of the deemed disposal (CGT event I1) rules (which apply to all non-Australian assets at the time of departure).

Only individuals who are Australian residents can elect to defer exit tax at the time of their departure.

If Australian residents chose deferral, the crypto is treated as taxable Australian property during non-resident period and will fall under the cost base reset on re-entry (market value at return). The CGT is deferred until the earlier of: 

• The time an alternative CGT event happens to the asset.
  
• The time the taxpayer once again becomes a tax resident (as referred to in this article).  

Otherwise, if they chose to pay Capital Gains Tax on departure, any further gains accruing while offshore would be outside of Australian tax. The asset is treated as disposed of and reacquired at market value at that time. Therefore, on return, the cost base remains the market value at departure.

Foreign Tax Credits Offset

Returning Australian tax residents are taxed on worldwide income and gains from the date of return to Australia.

If you dispose of crypto after becoming an Australian resident and that transaction is also taxed by the country of your former residency, Australia allows a foreign income tax offset for the foreign tax paid. This mitigates double taxation on post-return gains.

Recommendation:

• Confirm whether you are a Crypto Investor or a Crypto Trader.
  
• Review your crypto sales made while abroad – those would typically not be subject to Australian tax (since you would be considered non-resident), but they might be taxable in your previous country of residence.
  
• Ensure you have documentation for foreign taxes paid in other country, to claim a foreign tax credit in Australia to avoid double taxation.

Crypto Tax Reporting Checklist – Australia

1. Establish Your Tax Residency Date

• Confirm the exact date you resumed Australian tax residency.
  
• Confirm the date when you departed Australia and became a non-resident for Australian income tax purposes.
  
• Check whether you have made an election to Deem Dispose OR Opt-Out of Deemed Disposal Rules in the year of departure.

2. Portfolio Valuation

• Revalue all crypto assets at the date when you resumed your Australian tax residency.

Keep all Records:

• Coin / token name.
  
• Quantity held.
  
• Market value in AUD.
  
• Exchange/platform used.

3. Transaction Records

Maintain detailed records for each transaction, including:

• Date and time.
  
• Type (buy, sell, swap, transfer, staking, mining, airdrop, etc.).
  
• Convert foreign currency to AUD value at time of transaction.
  
• Fees paid.
  
• Wallet addresses and exchange details.
  
• Declare any crypto held on foreign exchanges or wallets.
  
• Include in your Foreign Income Tax Offset if applicable.

4. Classification – Investor Vs Trader

 Determine if your activity qualifies as:

• Investor: Long-term holding, occasional trades → CGT applies.
  
• Trader: Frequent, business-like activity → Income tax applies.

5. Classification – Investor Vs Trader

• Calculate gains/losses from disposals after resuming Australian tax residency.
  
• Confirm whether 50% CGT discount applies to assets held >12 months.
  
• Track carry-forward losses from previous years (if applicable).

6. Income from Crypto (Traders)

Report any crypto earned as ordinary income, including:

• Staking rewards.
  
• Mining income.
  
• Airdrops.
  
• DeFi yield farming.
  
• Crypto received for services.

7. Lodge Your Tax return

• Contact Andersen in Australia to assist with your Australian tax filing.
  
• Don’t forget to provide all information on your crypto transactions.
  
• Keep Your Records for at least 5 years.

How Andersen Australia Can Support You.

At Andersen, our Global Mobility team supports organisations at every stage, from first-time outbound transfers to mature multinational programs managing global workforces. For crypto investors and professionals returning to Australia, our services help ensure compliance and strategic alignment across borders.

We offer:

• Scalable global mobility policy development.
  
• Tax and social security planning for international assignments and remote work.
  
• Assignment cost projections and equalisation modelling.
  
• Immigration advisory and visa structuring.
  
• Shadow payroll setup and ATO reporting.
  
• Equity plan taxation and mobile employee compliance.
  
• Risk identification and audit readiness reviews.

Whether you’re relocating a single employee or scaling a global team, our approach is practical, technically precise, and tailored to your needs. To explore how to structure or expand your mobility program, contact Andersen. We’ll help you align people movement with compliance, governance, and business strategy – from day one.