This was a response put up recently by the ATO which we think clarifies their position on the $10,000 PUA exemption perfectly. Its basically what we have advised all along but its nice to see the regulators agree
Put plainly, if you buy cryptocurrency with the aim of making a profit, the cryptocurrency will not be a personal use asset, regardless of the nature of the asset(s) you acquire when you dispose of the cryptocurrency.
Working this out always depends on the particular facts and circumstances of each case. You’ll need to consider the purpose for which the cryptocurrency was acquired and kept and what the cryptocurrency is used for. It does not just depend on the nature of the assets you purchase when disposing of the cryptocurrency. The basic rules are as follows.
Cryptocurrency that is kept or used mainly for the purpose of profit-making or investment is not a personal use asset.
Cryptocurrency that is kept or used to facilitate purchases or sales in the course of carrying on business is not a personal use asset.
Cryptocurrency that was acquired and is kept or used mainly to make purchases of items for personal use or consumption may be a personal use asset.
Remember, if you do make a capital gain from a cryptocurrency that is a personal use asset, the capital gain is still only disregarded if the cost you incurred in order to acquire the cryptocurrency is $10,000 or less.
If capital gains tax does apply, it won't treated as a separate tax - you'll report any capital gain in your tax return, where it'll be added to your assessable income and may increase the amount of tax you need to pay. Because tax isn't withheld from your salary and wages to cover capital gains, you may want to work out how much tax you'll owe and set aside sufficient funds to cover the amount. Special rules apply in calculating capital gains, and you'll need to ensure you keep accurate records to help you complete your tax return.
Hope that helps!