Issue

How do I process the internal transfer of Cryptocurrency assets between wallets when using Custom Holding Accounts and ensure there are no CGT implications?

Resolution:

Scenario 1

The SMSF holds two separate Crytocurrency wallets and these have been set up as two different Custom Holding Accounts:

• Coinspot Exchange
• Binance Exchange

Each of these wallets contain a number of different cryptocurrency wallets but are being accounted for as one line item. 

In this scenario, the investment in GALA is transferred from the Coinspot Wallet to the Binance Wallet.

Navigate to Fund Level > Transactions > Browse Bank Statements

1. Select Coinspot Exchange from the drop down box
2. Process a 'Cash Out' transaction for the cost base of the GALA investment
3. Select Binance Exchange from the drop down box
4. Process a 'Cash In' transaction for the same amount as Step 2 above. 
5. Match these two cash events in the Match Transactions screen. 

Navigate to Fund Level > Investments > Browse Holdings

1. Select the radio button (three dots) to the left of each exchange
2. Select 'Security Issue Price'
3. Record the total value of each wallet as the terminating price

Scenario 2

The SMSF holds one Cryptocurrency asset set up as a Custom Holding Account - Coinspot Exchange.

The investment in Bitcoin is transferred out from Coinspot to Binance Exchange, however the fund is going to account for the investments in Binance as separate Investment Accounts, enabling the tracking of units held and cost bases. 

Navigate to Fund Level > Transactions > Browse Bank Statements

1. Select Coinspot Exchange from the drop down box
2. Process a 'Cash Out' transaction for the cost base of the Bitcoin Investment

Navigate to Fund Level > Investment > Investment Account 

1. Set up a new security code for Bitcoin 
2. Create the Investment Account (example Reporting Categories below)

Navigate to Business Level > Transactions > Excel Transaction Loader

1. Download the Excel Transaction Loader for your brand
2. Go to the Portfolio Tab
3. Enter the details of the event including the correct CGT date and cost base
4. Upload the transaction into the fund - the Holding Account is the newly created Investment Account and the type will be Unlisted Security Acquisition.

If you need more assistance with the Excel Transaction Loader, please refer to our Help Article for the Portfolio Tab. 

You can then match the Cash Out transaction with the purchase event uploaded via the Excel Transaction Loader. You can also update the Market Value in the same way as Scenario 1.