Tax free crypto profits

[Willowann]

Hello,

I'm sure this has been asked many times so I'm sorry to ask again.

Is there a way to open a company so that cyprto holdings if sold have 0% CGT? I'm guessing there must be a way other than moving to Portugal, Switzerland, Dubai etc

 

[Martin Everson]

Problem is CFC rules. It does not matter about whether the companies profits are tax free on selling the crypto. The tax issue moves to the owner (you) of the company where some CFC rules dictate that the profits of a foreign company whether distributed or not are charged to the income of the shareholder or controlling party. So you need to look at your countries CFC rules and if you fall into taxable CFC income then move.

P.S You also need to look at the DTA between your country and the tax free country which may help (next to zero chance actually....lol).

 

[Willowann]

Thanks for your reply. So if you can find a country with untaxable CFC rules you could in theory set up a company and then not pay tax on your crypto gains?

I guess my questions should have just been how do I not pay tax on crypto gains? That probably makes it more simple. I have a US and EU passport.

 

[Konstanz]

It's possible, but such structure would not be cheap.
You would have to have foreign company with substance.
Also, if you take something from your company - it would be stilled taxed anyway.

 

[Willowann]

Thank you! So the best bet is just to move to a tax free crypto country.

 

[CaptK]

Yes BUT, being US citizen, means you are liable for world wide taxed.
For you it maybe better to sacrifice an amount and pay the tax. Or renounce your US citizenship and utilise your EU passport.

 

[Willowann]

Yes, the stupid US citezen tax. What is so frustrating to me about that is I have never even lived in the US. I was born there and moved to the EU as a baby. I am actually unmarried but in a long term realtionship so maybe it's best he holds and sells all the crypto to avoid double taxation.

 

[Willowann]

When I say long term relationship we are basically married. We just haven't done it legally because of financial reason.

 

[CaptK]

But you have renewed your passport Which is the problem.

Tbh if they haven't come for you now then I doubt they will. Get your structure right and you will be fine.

 

[Martin Everson]

I have a US and EU passport.

US Passport? That changes everything. Just pay your taxes and take the hit. Don't waste your time looking for a solution as a US passport holder.

 

[Willowann]

CaptK buy structure do you mean my partner holding the assets? Really we don't have a exit strategy right now because the crypto tax thing seems like a nightmare. I think we may just keep DCAing and hold long term. Not sure I have the nerve to try and time the market.

Does anyone know how the US tax your husbands assets and income if you live aboard? Do they look solely at your earnings or tax the family income? (for the future when we marry). I do not have an income as I help him with his business and we live off the money he has made.

What are the downsides to renouncing US citizenship? Can one get it back if they really decide they want to move back to the US? And do the US tax you on assets that have not been sold yet? I heard that if you have over a million dollars they tax you still (something like that) I don't have that much!

I have never even filled a US tax return and only recently found out I was meant to, but as I don't have an income maybe I don't? We have know plans to live in the US in the next ten years (or ever) but maybe its good to have options.

Thanks for all your help

 

[Martin Everson]

Does anyone know how the US tax your husbands assets and income if you live aboard? Do they look solely at your earnings or tax the family income? (for the future when we marry). I do not have an income as I help him with his business and we live off the money he has made.

Should be none of their business but get professional advice. US tax system is not something to play around with.

What are the downsides to renouncing US citizenship?

None

Can one get it back if they really decide they want to move back to the US?

No its an irrevocable act once done.

And do the US tax you on assets that have not been sold yet?

If you mean after renouncing US citizenship then yes. They tax you on all assets at fair market value as if you sold them on day you renounce. That includes pension and if you own a house with your partner your half of that house etc...lol.

I heard that if you have over a million dollars they tax you still (something like that) I don't have that much!

See below

https://americansoverseas.org/en/knowledge-centre/us-taxes-and-liability/exit-tax-us/
P.S Bottom line seek professional advice before marrying as an American living outside America. Don't start holding assets jointly with a partner while your a yanky as it has tax implications and even worse implications if one day you want to revoke your US citizenship. Remember no one knows what tax rates will apply for revoking citizenship in future or what the rules will look like then

 

[Rzeznik]

And do the US tax you on assets that have not been sold yet?

So you have to move avawy faster than it will go up in value x100 . You need do it before it rise to some lvl becouse you will endup paying.

 

[Willowann]

So you have to move avawy faster than it will go up in value x100 . You need do it before it rise to some lvl becouse you will endup paying.

What is lvl?

 

[CyprusLawyer101]

Hi,
I have been structuring for a few clients on how to avoid taxation on crypto. We are able to assist crypto investors who hold the crypto on their name to avoid taxation at the point of conversion.
We are selective in who we take on board and yes we charge substantial fees. No need to leave your country.

 

[CyprusLawyer101]

Hello,

I'm sure this has been asked many times so I'm sorry to ask again.

Is there a way to open a company so that cyprto holdings if sold have 0% CGT? I'm guessing there must be a way other than moving to Portugal, Switzerland, Dubai etc

I have been structuring for a few clients on how to avoid taxation on crypto. We are able to assist crypto investors who hold the crypto on their name to avoid taxation at the point of conversion.
We are selective in who we take on board and yes we charge substantial fees. No need to leave your country.

 

[Willowann]

I have been structuring for a few clients on how to avoid taxation on crypto. We are able to assist crypto investors who hold the crypto on their name to avoid taxation at the point of conversion.
We are selective in who we take on board and yes we charge substantial fees. No need to leave your country.

I'm just a small potatoe and doubt you would want to take me on for my low net worth. Thanks for letting me know though.

 

[Willowann]

So the plot continues... My partner has a UK passport (like me) and now an Austrian passport. But it turns out that his mother has a US passport I've spoken with 4 different lawyers who all said different things. Two said he is a US citezen because of his mother and two said he lost the right to be a US citezen because he didn't apply before the age of 21. She was born there and lived there briefly as a child while her father worked at a university.

Any ideas of who I can speak to about tax laws? Would really appreciate some recommendations

 

[Rzeznik]

Would really appreciate some recommendations

To me she had right to be US citizen if she aplied for it. If she was not registered as US citzen then US doesn't even know about her.
If there is law that she have to apply for citizenship or be registered then case is solved.
Try find that law or curt case.

To be fair I have found that law is getting messy every day so lawyers who speaks to me without proof from article is pure BS.
If you have 2 lawyers saying different things only written "law" can clear that mess.
Many lawyers if don't give you precise answer in most cases their advice can land in trash if you find another that will give you some "written law " that proves his POV.