u/viper2097

Hi Bitcoiners.

I was the guy who wrote the long post almost a month ago about the upcoming tax changes when everyone still thought they were only applicable to realestate.

I just wanted to run you all through what the official changes are and how they will effect us.
I've also found something hidden away in the budget papers that early Bitcoiners are going to like a lot...

So... Here we are... The Budget's been handed down and it's not great but it's also not as bad as some had thought.

Grandfathering:
Current Bitcoiners will have their 50% capital gains tax disscount PARTIALLY grandfathered.
There will be a "Snapshot" taken on July 1 2027 and let's hope there's some big moves to the upside between now and then because that snapshot is going to be VERY important for us.

We'll be able to use that price at ANY POINT IN THE FUTURE and only be taxed on HALF of it with the benefit of our 50% discount.

Now here's the thing no body's talking about and OG Bitcoiners with low cost basis will LOVE THIS!

We'll be allowed to RESET our cost base to that July 1st 2027 snap shot price.

Not only will our 50% CGT discount be grandfathered up to that point but we'll be able to take our cost base (which in my case is almost ZERO) and make it MUCH higher.

With this higher cost base, We'll pay much less tax than originally thought on gains made after July 1 2027 because of three reasons.

1. Our cost base is higher and gains are only calculated on money made ABOVE that amount
2. We'll be able to index the NEW cost base with CPI further reducing tax on our post 2027 gains.
3. If the price of bitcoin goes DOWN after July 1 2027, We'll be able to book that as a tax loss, We'll even be able to deduct that LOSS off of the grandfathered pre July 1 2027 GAIN!

Please keep in mind that any of the gains made under the new system will have a MINIMUM CGT bill of 30% but the gains from the grandfathered portion won't...

Look guys, Nothing in the new tax system makes things better for us than we had it before but we're largely protected and OG bitcoiners with zero(ish) cost basis like myself will probably be pretty happy with the cost base reset. There are a number of ways to make it work for you!

As for the "younger generation" who this budget was designed to uplift? Well... You haven't yet had a chance to delve into Bitcoin (or any asset for that matter) and you guys are screwed...

-----

Source:

The 50 per cent CGT discount will apply to the difference between the asset’s cost base and its value at 1 July 2027. Indexation and the minimum tax will be used to calculate the CGT on gains accruing from 1 July 2027 (using the asset’s value at 1 July 2027 as the asset’s cost base).”

-Budget Papers

Hi Bitcoiners.

I was the guy who wrote the long post almost a month ago about the upcoming tax changes when everyone still thought they were only applicable to realestate.

I just wanted to run you all through what the official changes are and how they will effect us.
I've also found something hidden away in the budget papers that early Bitcoiners are going to like a lot...

So... Here we are... The Budget's been handed down and it's not great but it's also not as bad as some had thought.

Grandfathering:
Current Bitcoiners will have their 50% capital gains tax disscount PARTIALLY grandfathered.
There will be a "Snapshot" taken on July 1 2027 and let's hope there's some big moves to the upside between now and then because that snapshot is going to be VERY important for us.

We'll be able to use that price at ANY POINT IN THE FUTURE and only be taxed on HALF of it with the benefit of our 50% discount.

Now here's the thing no body's talking about and OG Bitcoiners with low cost basis will LOVE THIS!

We'll be allowed to RESET our cost base to that July 1st 2027 snap shot price.

Not only will our 50% CGT discount be grandfathered up to that point but we'll be able to take our cost base (which in my case is almost ZERO) and make it MUCH higher.

With this higher cost base, We'll pay much less tax than originally thought on gains made after July 1 2027 because of three reasons.

1. Our cost base is higher and gains are only calculated on money made ABOVE that amount
2. We'll be able to index the NEW cost base with CPI further reducing tax on our post 2027 gains.
3. If the price of bitcoin goes DOWN after July 1 2027, We'll be able to book that as a tax loss, We'll even be able to deduct that LOSS off of the grandfathered pre July 1 2027 GAIN!

Please keep in mind that any of the gains made under the new system will have a MINIMUM CGT bill of 30% but the gains from the grandfathered portion won't...

Look guys, Nothing in the new tax system makes things better for us than we had it before but we're largely protected and OG bitcoiners with zero(ish) cost basis like myself will probably be pretty happy with the cost base reset. There are a number of ways to make it work for you!

As for the "younger generation" who this budget was designed to uplift? Well... You haven't yet had a chance to delve into Bitcoin (or any asset for that matter) and you guys are screwed...

-----

Source:

The 50 per cent CGT discount will apply to the difference between the asset’s cost base and its value at 1 July 2027. Indexation and the minimum tax will be used to calculate the CGT on gains accruing from 1 July 2027 (using the asset’s value at 1 July 2027 as the asset’s cost base).”

-Budget Papers

EDIT: There’s a few comments popping up looking to correct me and I’d like to be clear. At NO point did I say that you’ll get a 100% CGT discount with the cost base reset.

The cost base reset is only for the portion of the disposal AFTER July 1 2027

It’s a HUGE benefit for those with low cost base for the reasons I’ve laid out above.

I thought this was clear in my post.

TLDR; My tax bill literally DOUBLES under proposed CGT changes.

Hi everyone, I just wanted to take a moment to share my research regarding the upcoming CGT changes that have been floated in the media over the last week.

Please keep in mind that these changes aren’t finalised so it’s speculative but still a MUST READ for early Bitcoiners or even shitcoiners who’ve had large wins.

According to Nine news papers; The current preferred CGT reform will be based around the Pre-1999 Howard era CGT system which adjusts the value of the COST BASIS for inflation and does away with the 50% capital gains tax discount we currently enjoy.

Let me elaborate with examples.

Under the current system, I can sell a Bitcoin I bought 15 years ago at $1 for $100,001 giving me a $100,000 profit. I apply the 50% discount and I’m left with $50,000 which gets taxed at my nominal tax rate (in my case) 47%

In total, I’m taxed about $23,500 in tax for $100,000 in Bitcoin I sell.

Under the Pre 1999 system (The system currently favored as the system most likely to be reintroduced) I’d sell my $1 Bitcoin for $101,000 and then I’d adjust the cost basis for inflation. It would be about $1.56 at 3% per year (compound adjusted)

That would mean I’d be getting taxed on a profit of $99,998.44 and would pay a total tax bill of $46,999.27 for every $100,000 of Bitcoin I sell.

My tax bill literally DOUBLES under the proposed new system.

Now look, I want to be VERY clear that I’m not making and judgments on weather or not I think the current system is fairer that the other or not. That’s not what this post is about, the point of this post is simply to share the research I’ve done with people in a similar position to me so that you can begin to start war gaming the best way forward from here.