Is There A Tax On Transferring Crypto Between Your Own Wallets?

  • 26 May 2025
  • 3 min read
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Cryptocurrency continues to grow in popularity, with more individuals and businesses engaging in buying, holding, and trading digital assets. As crypto adoption increases, so does the importance of understanding how the Australian Taxation Office (ATO) treats various crypto transactions. One of the most common questions among Australian crypto holders is: Is there a tax on transferring crypto between your own wallets?

 

This article provides a comprehensive, up-to-date overview of the tax implications for moving cryptocurrency between wallets you own, as well as related record-keeping requirements and important caveats. All information is specific to Australian tax law. 

Crypto Transfers Between Your Own Wallets

Transferring cryptocurrency between wallets you own is not a taxable event in Australia. The ATO has made it clear that moving your crypto assets from one digital wallet to another, provided you retain ownership of the assets, does not trigger a capital gains tax (CGT) event or any other tax liability.

This applies whether you are moving your crypto;

  • From a hardware wallet to a software wallet
  • Between exchanges (e.g., from Binance to CoinSpot)
  • From a personal wallet to a cold storage device

As long as you remain the beneficial owner of the cryptocurrency throughout the process, these transfers are not considered disposals and do not need to be reported as taxable events. 

Why Are Internal Crypto Transfers Not Taxed?

The key reason is that the ATO considers a “disposal” of cryptocurrency to occur only when you sell, trade, swap, gift, or otherwise relinquish ownership of your crypto. Internal transfers, where you retain full ownership and control, do not meet the definition of a disposal. 

Disposal events that are taxable include;

  • Selling crypto for Australian dollars or another fiat currency
  • Swapping one cryptocurrency for another (e.g., BTC to ETH)
  • Using crypto to pay for goods or services
  • Gifting crypto to another person (including family members)
  • Transferring crypto to a wallet you do not own

Important Caveats: Transfer Fees and Record-Keeping

While the act of transferring crypto between your own wallets is not taxable, there are two important caveats for consumers; 

Transfer Fees Paid in Crypto Are Taxable

Most blockchain networks charge a transaction or network fee (sometimes called a “gas fee”) when you move crypto between wallets. If you pay this fee using cryptocurrency (rather than in AUD), the ATO considers this a disposal of the portion of crypto used to pay the fee. 

Example:

If you move 1 ETH from your Binance wallet to your MetaMask wallet and pay a network fee of 0.005 ETH, you are considered to have disposed of 0.005 ETH. You must calculate the capital gain or loss on this amount, based on the market value of ETH at the time of the transaction and your original cost base for that ETH. 

If you pay the fee in Australian dollars, there is no tax implication for the fee itself. 

Record-Keeping Is Essential 

Even though internal transfers are not taxable, you must keep detailed reords of all your wallet-to-wallet movements. This is because you need to track the cost base (the original purchase price) of your crypot assets for furture disposals. If you later sell, swap. or otherwise dispose of the crypto, accurate records are essential for calculating your capital gains or losses.

Required records include;

  • Date of each transfer
  • Amount and type of cryptocurrency transferred
  • Wallet addresses invloved
  • Value of the crypto (in AUD0 at the time of acquisition and transfer
  • Details of any transfer fees paid and the method of payment

The ATO recommeds keeping theses records for at least five years after the trasaction. 

What If You Transfer Crypto to Someone Else's Wallet?

Transferring crypto to a wallet that you do not own, such as sending coins to a friend, family member, or third party, is considered a disposal and is subject to capital gains tax. The capital gain or loss is calculated based on the market value of the crypto at the time of transfer and your original cost base. 

Example:

You bought 2 BTC $2,000. Later, you gift those 2 BTC to a friend when the market value is $3,000. The capital gain is $1,000, and you must report this on your tax return.

How Crypto Is Taxed: A Quick Refresher

  • Crypto is not considered money or foreign currency by the ATO. It is classified as property and treated as a CGT asset. 
  • Capital gains tax applies when you dispose of crypto by selling, swapping, gifting, or using it for purchases. 
  • If you hold crypto for more than 12 months before disposing of it, you may be eligible for a 50% CGT discount.
  • Crypto earned from mining, staking, or airdrops may be taxed as income, depending on your circumstances. 

Best Practices for Crypto Users

  • Always keep thorough records: Even for internal transfers, accurate records help you track your cost base and simplify future tax calculations.
  • Use crypto tax software: Tools like Crypto Tax Calculator Australia can automate record-keeping and tax reporting.
  • Monitor transfer fees: Be aware that fees paid in crypto are taxable disposals, and you must report any gains or losses.
  • Consult a professional: If your crypto activity is complex, or you are unsure of your tax obligations, seek advice from a qualified tax accountant familiar with cryptocurrency.

Conclusion

For Australian consumers, transferring cryptocurrency between your own wallets is not a taxable event, provided you maintain ownership of the assets throughout the process. However, transfer fees paid in cryptocurrency are considered disposals and may be subject to capital gains tax. Keeping detailed records of all transactions, including internal transfers and associated fees, is essential for accurate tax reporting and compliance with ATO requirements.

As the regulatory landscape evolves and crypto adoption grows, staying informed and maintaining best practices in record-keeping will help you manage your tax obligations efficiently and avoid unnecessary penalties.

Disclaimer: The information in this article is for general guidance only and does not constitute financial or tax advice. Always consult a qualified tax professional for advice tailored to your individual circumstances.