Living room of satoshi - Tax query

I have a smallish crypto holding. At some point in the distant future, I plan to sell and this would trigger a CGT event (as the Aus Govt would have visibility to the off-ramp exchange on sale). I was wondering how this works when paying bills at living room of satoshi? When using crypto to pay a bill in AUD, would this not effectively be triggering a CGT Profit/Loss event in terms of crypto value? What am I missing? Thanks.

 

Maybe I explained this poorly as there is not a single respone. I asked this question on this forum as there are crypto investors/enthusiasts on here. Let me try the question again with an example.

I buy 1 BTC for 5k a while back. That 1 BTC is now worth say 10k. If I sell this 1 BTC in an Australian exchange, I declare CGT on my tax return as per normal CGT rules. If I instead choose to pay bills (eg. Living room of Satoshi), would the CGT rules still apply (ie in effect the BTC value increase is still being realized in AUD)?

 

What the heck is this "living room of satoshi" you are paying bills in???

 

Sorry qak, I thought this was a commonly known website in Australia among cryto investors - Living Room of Satoshi

 

The scope of my question is a lot bigger as it applies to pretty much any website that accepts cryptocurrency as means of payment for goods and services.

Let's take another example. I went on holiday and exchange AUD for USD. When I came back, I ended up with USD that I didn't bother changing back to AUD. Due to currency fluctuations, the USD is now worth say 20% more in AUD terms. I can realise the gains in AUD by currency conversion or purchasing something in USD. Either way, there is no CGT in play here, as technically in ATO's eyes, I am not a "FX trader". Can I apply this logic to crypto holdings? My guess is no as the ATO would probably see crypto as an asset class akin to say gold instead of traditional FIAT currency. I was hoping someone who has experience with this can share their knowledge.

 

Does this help:

Answered: Cryptocurrency Tax Treatment - ATO Community

Tax treatment of crypto-currencies in Australia - specifically bitcoin

 

Thanks a lot Qak. You have pointed me in the right direction. I will spend time analysing those links in detail.

 

Exchange of coin for anything of value is a disposal of the CGT asset. Its up to you to value and keep records.

Tax treatment of crypto-currencies in Australia - specifically bitcoin

Your coin may also be (wholly or partly) a personal use asset rather than a CGT asset used and held for investment eg Peter buys 2 coin so he can spend the coin on the dark web to buy hybrid drugs over several months. This coin use is likely a personal use asset. Jenny has her PC subject to ransomware. She buys coin which aftre 2 days incraes in value. Jenny uses the coin to pay the ransom and keeps the profit. This too may be a personal use. Its like buying USD cash at the airport and coming home and changing whats left and the value has been a win.