A transfer occurs when a user moves an asset between two wallets or accounts that they personally own.
Although the asset is moved from one account to another, its ownership does not change. The asset itself remains the same, and no sale or exchange takes placeâthe only change is its location.
Since there is no change in ownership and no disposal of the asset, the transactions making up the transfer do not generate any capital gain or loss. The original acquisition cost of the asset is therefore preserved and carried over to the destination wallet or account.
Example:
Bob holds 5 BTC in his Kraken account
for security reasons, Bob decides to transfer the BTC to a cold wallet
Bob's balance remains 5 BTC, only the location of the asset has changed
A transfer consists of two linked transactions: one outgoing and one incoming, involving the same asset, for the same amount, and occurring within a short time frame.
Example:
Bob withdraws 5BTC from his Kraken account on 20 August 2025 at 3.31pm (withdrawal/outgoing transaction)
Bob deposits 5BTC on his hard wallet on 20 August 2025 at 3.32pm (deposit/ingoing transaction)