Nostr Web Client

Hi again, so I’ve reviewed Ledn’s Custodied Loans to see if they also risk CGT events.

Ledn have had these on offer for a while now, usually at an extra 1% premium to their Standard Loans.

However now the Custodied Loan is the only one they offer, and the Loan Agreement language and structure appears to be more CGT friendly (from what I can deduce using ChatGPT as a research assistant).

Here’s what I’ve found:

Under the Custodied Loan agreement, the borrower retains ownership of the Bitcoin collateral, granting

LEDN only a security interest.

Key clause (Section 4(c)(i)):

"Borrower grants to Lender a first priority security interest in and to the Collateral... The Borrower shall retain

all rights of ownership in the Collateral, subject to the Lender's security interest."

ATO Implication:

Because the borrower retains beneficial ownership, the ATO is unlikely to treat this as a CGT event. The security interest does not constitute a disposal for CGT purposes.

Hope this helps, as usual DYOR or consult a tax account (LIKE I SHOULD HAVE DONE 😅)

Jake Woodhouse 5mo ago

That's really interesting. In short, should you choose that updated Ledn contract, then you can be confident beneficial ownership has not altered.

I think you're right, and my opinion is I would happily go up against the ATO with that if it became an issue.

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Discussion

Ditch Gravy 5mo ago

It definitely makes more sense to structure bitcoin loans this way, so that the borrower doesn’t incur any CGT.

I’m a bit disappointed Ledn didn’t make this clearer when offering the loan. I guess they covered their bases, but it’s a little bit underhanded. It’s a shame because I do like them as a company, and will most likely continue to use them.

I’ve looked into some of the other lending platforms, but tbh I think the B2X loan is such a great product for stacking BTC, I don’t know uwhy more people aren’t talking about it!

Thanks again for the heads up nostr:nprofile1qqsfky5y0u7j30ug2r4uq0udf9dp468e5tyxm0dzjhys24npnglwsvgprpmhxue69uhhqun9d45h2mfwwpexjmtpdshxuet5qyv8wumn8ghj7un9d3shjtnrw4e8yetwwshxv7tf9u7u7xzm and nostr:nprofile1qqs043gn588da502h36q0sffjay9m69mk28dmm805qtgzl7g6n6q0fgpz3mhxue69uhhyetvv9ujuerpd46hxtnfduqs6amnwvaz7tmwdaejumr0dsj8e6tj for the shout out 🙏🏻👊🏻