24/11/2018
Education post 1 - Bitcoin requested by Eddie Wish
Bitcoin is a Crypto or digital/virtual Currency and exists as a 'digital token'. Bitcoin uses 'blockchain' technology to post transactions, this allows transactions to occur directly and anomalously between users. This can create reduced transaction fees and differs from our every day banking system in Australia. We currently use a system where by (depending on the amount), the bank transactions are added up at the end of the day and each bank settles its accounts with each other through their 'Exchange Settlement Account', which are governed by the Reserve Bank of Australia (RBA). There are other systems in place, however that is the most used one.
The Australian Tax Office (ATO) website explains that a Capital Gains Tax event can occur when you, sell or gift cryptocurrency, exchange or trade crypto, convert the currency to AUD or use the currency to obtain goods or services. There are rules and exemptions on CGT events when it comes to Personal Use Assets, but an accountant may need to assist with that.
