Australian Crypto Investors Weigh Overseas Relocation Over Tax Hike

Australian crypto investors are evaluating overseas relocation and alternative tax structures as the country prepares to implement significant capital gains tax (CGT) increases starting in July 2027. According to Cointelegraph, the impending adjustments will raise the top rate on long-term crypto gains to 47%, excluding inflation adjustments on the cost basis.

The impending changes have prompted some local participants to consider moving to jurisdictions with zero capital gains tax on long-term crypto holdings, such as Singapore, Portugal, Malta, the United Arab Emirates, and Hong Kong. Finder.com founder Fred Schebesta has already relocated to Singapore, while other industry members report clients departing for destinations like the Bahamas. However, industry figures caution that leaving Australia requires cutting substantial ties and addressing potential departure exit taxes.

Alternative Local Structures

For investors choosing to remain in Australia, alternative structures such as self-managed super funds (SMSFs) or corporate entities are being utilized. While SMSFs offer tax advantages, they are primarily suited for older investors or those willing to lock up assets until retirement. Younger market participants, such as Collective Shift founder Ben Simpson, have opted to operate through single-person companies to cap capital gains taxation at the 25% corporate rate during active trading.

However, advisers note that corporate structuring involves distinct trade-offs. While trading within a company allows investors to retain capital at the 25% rate while compounding positions, withdrawing funds triggers personal income tax obligations up to the marginal 47% rate. Additionally, departure taxes upon exiting Australia present a significant hurdle for those holding substantial unrealized gains.

Key facts

• Australia's top long-term crypto CGT rate will rise to 47% starting in July 2027.
• Jurisdictions like Singapore, Portugal, Malta, the UAE, and Hong Kong offer 0% capital gains tax on long-term crypto.
• Corporate structures in Australia allow a 25% tax rate during trading, though personal marginal rates apply upon fund extraction.
• Industry participants note that expatriating from Australia requires severing local ties and can trigger departure taxes.