The tax position: a CGT asset
The ATO treats crypto assets as property and, for most holders, as capital gains tax assets. A CGT event happens when you sell, swap one crypto for another, gift it, or use it to buy goods and services - not merely when you convert to Australian dollars.
Where an asset has been held for at least 12 months, individuals and trusts may access the 50% CGT discount; complying superannuation funds get one third. Traders and businesses may instead hold crypto as trading stock, which is taxed differently.
Records are a legal obligation, not a nicety
The ATO expects records of every transaction: date, value in Australian dollars, purpose, and the other party where known. Its record-keeping guidance for crypto applies for the standard retention period, and exchange data matching means undeclared disposals are routinely detected.
For estates this matters twice over. Poor records make the deceased's final return hard to complete, and they make the beneficiary's future cost base impossible to prove.
Regulation: ASIC and AUSTRAC
Bitcoin itself is generally not a financial product, so buying and holding it is largely unregulated. But businesses around it are: digital currency exchanges must register with AUSTRAC for anti-money-laundering purposes, and products such as crypto ETFs or tokens with financial-product features fall under ASIC oversight.
The practical implication: nobody is insuring or supervising your self-custody. Consumer protections that exist for bank accounts do not exist here.
Bitcoin is estate property
Because crypto is property, it forms part of the deceased estate and falls within the executor's duty to identify, secure and distribute assets. It is also within reach of family provision claims and creditor claims in the same way as any other asset.
Legal ownership and practical control are different things, though. An executor may hold clear legal title and still be unable to touch a wallet - the reason every plan needs an access design, not just a will clause.
Death does not trigger CGT - transfer to a beneficiary usually does not either
Under the ATO's deceased estate CGT rules, a CGT event is generally disregarded when an asset passes to a legal personal representative or beneficiary. The beneficiary usually inherits the deceased's cost base and acquisition date for a post-CGT asset, and pays tax when they later dispose of it.
This is general information, not tax advice - specific outcomes depend on the asset's history, the beneficiary's residency and the terms of the will, so confirm with a registered tax practitioner.