HIFO, LIFO & average cost — what SARS allows

The short answer

HIFO, LIFO and weighted-average cost are popular in crypto tax software because they can reduce a reported gain — but for South African individuals they are not the accepted methods. SARS recognises FIFO and specific identification for identical assets under the Eighth Schedule. Do not import a method from a US or pooling jurisdiction and assume SARS will accept it.

HIFO (highest-in, first-out)

HIFO disposes of the highest-cost units first to minimise the gain. It is not a recognised SARS allocation method in its own right. You can achieve a similar outcome only through genuine specific identification — where you can actually identify and substantiate the specific high-cost units disposed of. Labelling a default-FIFO result as "HIFO" without that evidence is not acceptable.

LIFO (last-in, first-out)

LIFO disposes of the most recently acquired units first. It is not an accepted method for identical crypto assets in South Africa. Use FIFO or substantiated specific identification instead.

Weighted-average cost

Weighted-average (pooling) blends all acquisitions into one average cost. It is the UK approach (the Section 104 pool) — but it is not permitted for South African individuals under the Eighth Schedule for identical assets. This is one of the most common cross-border errors.

What to do instead

Use FIFO as your default, or specific identification where you can genuinely substantiate the units disposed of, applied consistently. Coinfig calculates on FIFO so your result is defensible.

Not tax advice

Confirm the accepted methods for your circumstances with a registered tax practitioner.