When you dispose of cryptocurrency to pay for a fee, you may trigger a capital gain tax (CGT) event on the disposal value of the fee itself. As a result, this capital gain/loss is realised on the difference between the acquisition and disposal price of the cryptocurrency before "paying" for the fee.

As an example:

  1. You purchase 1 BNB to use for fees at the price of $10.

  2. Some time later, you then make a trade where you sell 100 DOGE and buy 1 ETH.

  3. The fees for this transaction are paid for in BNB and you pay a fee of 0.5 BNB. At the time of the sale, the price of BNB is now $15.

  4. As a result, you've made a gain on the BNB itself of $2.50 (i.e. gain on the fee) since the acquisition value of the 0.5 BNB is $5.00 and the disposal value of the 0.5 BNB is $7.50 ($7.50 - $5.00 = $2.50). This will trigger a CGT event of $2.50 for the sale of the BNB.

But is the fee taken into account into the cost base?

Yes - typically the fee will be taken into account into the cost base of one of the assets in the trade.

Following on from the previous example:

  1. The value of the 'fee' itself will be added to the cost base of the sale of the 100 DOGE.

  2. If for example, you acquired the 100 DOGE for a total value of $100, and when you sold it the total value was $500, then the cost base of the DOGE would be $100 + $7.50 fee (from the BNB) = $107.50.

  3. This will result in a CGT event of $500 - $107.50 = $392.50 at the time of the disposal of the DOGE.

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