How Aussie Bitcoiners can avoid 2027’s shock CGT hike: Part 1
From setting up an SMSF or a company, to just leaving the country entirely, here are some strategies Australian Bitcoiners can employ to deal with 2027’s massive CGT hike.
As the Australian government announced a significant capital gains tax (CGT) hike, crypto owners were left in shock. The new law effectively doubles the taxable component of gains, minus a small inflation discount. To counteract this increase, Australian Bitcoiners can explore various strategies to minimize their CGT liabilities.
Some individuals, like Finder founder Fred Schebesta, are taking a drastic approach by relocating to Singapore, a country with a 0% CGT rate. However, there are also more subtle methods to reduce CGT bills. One option is to set up a Self-Managed Super Fund (SMSF), which allows crypto trading at the company tax rate. Another option is to establish a company for trading crypto, taking advantage of the lower company tax rate.
Chris Bryki, a Stockspot analyst, compared the performance of ten different asset classes under the new CGT rules. He found that crypto ranks at the bottom due to its reliance on capital growth, making it even less appealing for investors after tax. To capitalize on the potential for future gains, it is advisable to record the value of all crypto assets held as of July 1, 2027, as gains made prior to this date will be taxed under the existing 50% discount scheme.
For those seeking a more long-term solution, setting up an SMSF could be an option. This allows crypto investors to accumulate and benefit from their holdings tax-free once they reach the age of 60. However, SMSFs come with compliance paperwork, audits, and fees that can make it challenging for smaller investors. Additionally, the long wait time before accessing the funds may not be suitable for younger crypto enthusiasts.
Written by urgent.news from Cointelegraph's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
