How do I process full & partial transfer between exchange platforms when I have set up my Cryptocurrency account as an Unlisted Investment?

Full Transfer

When the Fund holds the Cryptocurrency in both Wallets

Example Scenario:

Fund acquired 8,279 of Gala tokens for face value of $400 under CoinSpot Exchange on 01/07/2021 and 20,000 of Gala tokens through Independent Reserve on the same date.

Gala tokens under CoinSpot have been fully transferred to Independent Reserve Gala wallet address on 31/12/2021 at market value.

How do you process this in Class?

Step 1: Change CGT Status to ensure no CGT is triggered

Navigate to Entity Level > Investments > Browse Holdings

1. Select Investment 
2. Select 'Edit'
3. Tick 'Enable Editing of Reporting Categories'
4. Change Capital Gain Classification to 'Non-CGT Asset'
5. Save

Step 2: Dispose of the original holding from the exchange you are transferring from

Navigate to Entity Level > Transactions > Investment - Sell > Non-Cash Disposal

1. Select investment being transferred as 'Holding Account'
2. Enter the date of disposal as 'Transfer Date'
3. Click 'Sell-All' this will bring through the quantity held at transfer date
4. Record the original cost base as 'Market Value'
5. Enter relevant 'Description'
6. Submit

 

Step 3: Bring in the investment to the exchange you are transferring to

Navigate to Business Level > Transactions > Excel Transaction Loader

Once you have downloaded the Excel Transaction Loader for the relevant brand, please go to the 'Portfolio Tab' to enter the following details:

1. Enter Fund Code
2. Select Holding Reference Type as 'HoldingAccount'
3. Enter Holding Reference Code - This is the investment code of the investment you are transferring to (eg GALA_1)
4. Select Event Type as Unlisted Security Acquisition
5. Enter Code (same as Step 3 above)
6. Enter Effective Date - date of transfer (eg 31/12/2021)
7. Enter CGT Date - original CGT Date of purchase (eg 01/07/2021)
8. Enter Units - number of units transferred
9. Enter Net Amount - cost base of original purchase plus any transfer costs/brokerage fees
10. Enter Description 
11. Enter Total Brokerage - insert transfer costs/brokerage fees

Once all these details are entered you can load the file to Class. If you need assistance with this, please see our Excel Loader Help Guide article.

 

Once the file is loaded, you can navigate 'Match Transactions' screen and match the transaction created in Step 2 with the one created in Step 3.

The logic is same whether the transfer happened in the same financial year or across different financial years.

Step 4: Update the Value of the Cryptocurrency investment

Navigate to Entity Level > Investments > Browse Holding Accounts

1. Click on three dots to the right of the investment (radio button) and select Holding Price/Valuation
2. You can add the Market Value at the date of transfer or at 30 June - whichever is your preference for client reporting.

Other Scenarios

Transfer Cryptocurrency holding in one exchange platform to another platform which does not already hold that cryptocurrency.

Navigate to Entity Level > Investments > Browse Holding Account 

1. Select the Investment
2. Select Edit
3. Update the Code and/or Description to signify the new platform 

Transfer Full Holding of Cryptocurrency in one exchange platform to another exchange platform that already holds that Cryptocurrency.  

Navigate to Entity Level > Investments > Merge Holding Account

1. Enter Source Investment Account as the investment you are transferring from
2. Enter Target Investment Account as the investment you are transferring to
3. Enter the Action Date as the transfer date
4. Enter the relevant description

Another method is to navigate to Transactions > Investment - Corporate Actions >Spinoff/Demerger, however other factors need consideration to prevent CGT implications.

Partial Transfer

Example Scenario:

• Fund acquired Polygon (Matic) on 01/07/2021 using Binance exchange, the tokens acquired were 1,000 units at face value of $2,050 inclusive of brokerage fees.
• Fund also holds (Matic) under CoinSpot exchange.
• 500 tokens out of 1,000 were transferred from Binance to Coinspot (Matic)  wallet address on 31/12/2021 at market value.

How is this partial transfer processed in Class?

Step 1: Return of Capital to Exchange being transferred from

Navigate to Entity Level > Transactions > Investment – Corporate Action > Capital Return

1. Select Holding Account as the account you are transferring from
2. Enter Recorded Date & Payment Date as the transfer date
3. Enter Participating Quantity as the amount being transferred
4. Enter Payment Amount as the cost of 500 tokens being transferred from the exchange (in this case $1,025)
5. Enter relevant Description
6. Submit.

Step 2: Reduce the holdings in the exchange being transferred from 

Navigate to Entity Level > Transactions > Investment-Corporate Actions > Split Consolidation

1. Select Holding Account as the account you are transferring from
2. Enter relevant Description
3. Enter 'Adjustment Date' as the transfer date
4. Enter Original Quantity (being the amount held prior to transfer)
5. Enter New Quantity (being the amount held after the transfer)
6. Submit.

Step 3: Bring in holding in exchange you transferred to

Navigate to Business Level > Transactions > Excel Transaction Loader

Once you have downloaded the Excel Transaction Loader for the relevant brand, please go to the 'Portfolio Tab' to enter the following details:

1. Enter Fund Code
2. Select Holding Reference Type as 'HoldingAccount'
3. Enter Holding Reference Code - This is the investment code of the investment you are transferring 
4. Select Event Type as Unlisted Security Acquisition
5. Enter Code (same as Step 3 above)
6. Enter Effective Date - date of transfer (eg 31/12/2021)
7. Enter CGT Date - original CGT Date of purchase (eg 01/07/2021)
8. Enter Units - number of units transferred (eg 500)
9. Enter Net Amount - equal to the Capital Return from Step 1 plus any transfer costs/brokerage fees eg $1,029 ($1,025 + $4 brokerage)
10. Enter Description 
11. Enter Total Brokerage - insert transfer costs/brokerage fees eg $4

Once all these details are entered you can load the file to Class. If you need assistance with this, please see our Excel Loader Help Guide article.

Once the file is loaded, you can navigate 'Match Transactions' screen and match the transaction created in Step 2 with the one created in Step 3.

The logic is same whether the transfer happened in the same financial year or across different financial years.

Step 4: Update the Market Value of the Cryptocurrency 

Navigate to Entity Level > Investments > Browse Holding Accounts

1. Click on three dots to the right of the investment (radio button) and select Holding Price/Valuation
2. You can add the Market Value at the date of transfer or at 30 June - whichever is your preference for client reporting.