# "I am moving to the Isle of Man to avoid CGT on my crypto gains"



## Brendan Burgess

I met a guy at the Blockchain conference today who told me that he is moving to the Isle of Man to avoid CGT.  He has been mining cryptos since the start so I imagine he has a big sum and I presume he is not emigrating for 3 years to save €20k. 

He says he has to stay there for 3 years and can't realise the gains for three  years.

I told him "Assuming you have gains of €3m, then 67% of €3m is €2m which is a lot more than 100% of zero which is what your cryptos will be worth in three years."

But it's an interesting point.  How long would I have to emigrate for to avoid CGT on shares? 

Brendan


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## RedOnion

Without naming anyone, the case of the person who sold Esat is an interesting one to study. Moved to Portugal, where there was a double tax treaty, and at the time no CGT.

At the time, because of the double tax treaty, you only had to be tax resident in Portugal for the year the sale was made.

I've long since stopped studying tax, so not sure if the rules changed since.


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## elacsaplau

Thanks to the equity of the tax regime - for me having a non-domiciled wife was handy!

So are you on the road to Damascus, Brendan?


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## cremeegg

elacsaplau said:


> Thanks to the equity of the tax regime - for me having a non-domiciled wife was handy!



What is the advantage to a non-domiciled wife, apart from brains, beauty and personality of course. 

Serious question, my wife is an national of another EU country and we have significant unrealised capital gains.


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## elacsaplau

Serious answer - I won't have to consider reneging on my mortgage or not paying my tv licence!


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## Gus1970

Now, mining crypto from the very start, mmm. If he’s irish i know him for sure and whoever was there at those times woukd not be telling a stranger. But i am only speculating. I am not saying you didn’t hear it, i doubt the veradicity of what you heard.

All the best


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## Negotiator

Although he probably didn't foresee making such a large profit/gain mining Cryptos when he started, he could've saved himself the move by setting up an IoM Trust and use a SPV to trade/mine the cryptos. 

Things are very quiet over on the IoM since governments have tightened up on loopholes and implementing statutory reporting etc, not to mention Brexit. They are actively looking at new ways to drum up business and Cryptos is an area of interest for sure. As of about 12 months ago the IoM hadn't any specific guidelines or regulation in this area but that may have changed since then.


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## Negotiator

PS- He could still spend about 270 days in Ireland over the course of the 3 years anyway so not like he's stranded there. He'd also have the option of spending a good bit of time in the UK without becoming tax resident there. In fact if done correctly he could spend all his time in the UK and still not become tax resident there. 3 years is a lifetime in a place like IoM, lovely and all the island is!


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## Brendan Burgess

Gus1970 said:


> I am not saying you didn’t hear it, i doubt the veradicity of what you heard.



Hi Gus

There is a lot of spoof in the Bitcoin world, so he might have been spoofing.  

But there must be plenty of Irish people who are millionaires on paper from Bitcoin from buying it.  So the general question is whether they can move to the IoM or somewhere else to avoid CGT. 

The other point of course, is that they are much better selling out now while they can and paying the 33% CGT as 66% of €1m is a lot more than 100% of nothing.

Brendan


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## Gus1970

Brendan Burgess said:


> But there must be plenty of Irish people who are millionaires on paper from Bitcoin from buying it. So the general question is whether they can move to the IoM or somewhere else to avoid CGT.



Maybe, I have no idea, we could ask revenue for an estimate...



Brendan Burgess said:


> The other point of course, is that they are much better selling out now while they can and paying the 33% CGT as 66% of €1m is a lot more than 100% of nothing.



Of course, they are all fools as you normally say and will end up with nothing in their hands, hilarious.


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## dub_nerd

Gus1970 said:


> ...we could ask revenue for an estimate...


I doubt it -- there's no specific place to mention cryptocurrencies on a tax return. They would come under "other assets".


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## TheBigShort

Brendan Burgess said:


> than 100% of zero which is what your cryptos will be worth in three years."



Set your timers...April 27, 2021...the Crypto Apocalypse!


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## Brendan Burgess

TheBigShort said:


> April 27, 2021...the Crypto Apocalypse!



Hi Shortie 

It will be long before that.   Three years was my friend's understanding of how long he needed to be abroad for to avoid CGT.

Brendan


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## tecate

Brendan Burgess said:


> It will be long before that.


Nothing at that Blockchain conference swayed you then?


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## MrEarl

Hello Mr. Burgess,

It strikes me that our government, financial regulators, and our tax authorities have been very slow to put any sort of meaningful consideration into cryptos.  Regardless of personal opinions on cryptos, certain measures should really be in place to protect and / or benefit the state.

Any chance of a little summary of what else was discussed, or caught your attention, at the conference ?

Many thanks.


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## torblednam

MrEarl said:


> Hello Mr. Burgess,
> 
> It strikes me that our government, financial regulators, and our tax authorities have been very slow to put any sort of meaningful consideration into cryptos.  Regardless of personal opinions on cryptos, certain measures should really be in place to protect and / or benefit the state.



Could you expand on that a bit, as in what you think they should do / have done?

On the tax side, cryptos are an asset, fundamentally no different than any other asset / currency, so I'm not sure why you think the rule book should be torn up to deal with them.


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## Gordon Gekko

torblednam said:


> Could you expand on that a bit, as in what you think they should do / have done?
> 
> On the tax side, cryptos are an asset, fundamentally no different than any other asset / currency, so I'm not sure why you think the rule book should be torn up to deal with them.



I’d contend that tax compliance in relation to cryptos is a major issue; with other high-risk areas, special rules apply. There might therefore be merit in looking at withholding tax or special deemed disposal rules for cryptos.


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## elacsaplau

As ever, torblednam - you are on the money


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## torblednam

Gordon Gekko said:


> I’d contend that tax compliance in relation to cryptos is a major issue; with other high-risk areas, special rules apply. There might therefore be merit in looking at withholding tax or special deemed disposal rules for cryptos.



Totally agree that's a huge risk.

I'm sure the government would love to be able to apply a withholding tax, as that would be effective, but I don't see how that could be in any way feasible given the nature of what you're dealing with.

Deemed disposal rules don't really mitigate the main risk either. They might help add clarity to the timing and calculation of gains, but the tax evader will still be in the wind until they are somehow identified...


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## orka

Brendan Burgess said:


> Three years was my friend's understanding of how long he needed to be abroad for to avoid CGT.
> 
> Brendan


Your friend would have to be non-resident for 3 full tax years to cease being ordinarily resident and therefore no longer subject to Irish CGT on his crypto gains.  So from now, it would be 1 January 2022 before he would be able to sell and escape Irish CGT  - if there are any gains left by then - which, as you say, is a big risk.  If he had a very substantial gain, he could sell half now and then make the move and hope/pray that the crypto gains don't disappear in the next 3 years and 8 months.


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## Negotiator

orka said:


> Your friend would have to be non-resident for 3 full tax years to cease being ordinarily resident and therefore no longer subject to Irish CGT on his crypto gains.  So from now, it would be 1 January 2022 before he would be able to sell and escape Irish CGT  - if there are any gains left by then - which, as you say, is a big risk.  If he had a very substantial gain, he could sell half now and then make the move and hope/pray that the crypto gains don't disappear in the next 3 years and 8 months.



That's one way of doing it to hedge your bets but I personally would rather pay the CGT now than risk spending 3 years overseas to potentially end up with the same amount or less. It's a large chunk of your time to give up for something that's not certain. That's assuming that the only reason he would be moving is to save tax.


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## Gus1970

I am not sure why we are all so sure that bitcoin investors don't want to pay CGT. Would we have the same conversation if the ISE was up by 1,000%? No we wouldn't. Let's try to keep our bias in check. In another thread, apparently I am a scammer, in this one a tax evader, I am missing sex offender yet, but I am confident somebody will find a good reason for it.

Best,

Gus


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## orka

Gus1970 said:


> I am not sure why we are all so sure that bitcoin investors don't want to pay CGT.


Why are you so sure that we are all so sure that bitcoin investors don't want to pay CGT?  BB has asked about one friend who is a bitcoin investor.

And there are no easy decisions to not pay CGT.  Revenue have rules and as long as you stick to the rules and report what you need to report, there is no 'not paying CGT' - it just doesn't arise.  But it's not free - it comes at the cost of leaving your home for 3-4 years.  That's too high a price (both socially and financially) for most people.
I personally think BB's friend is mad to not cash in now, pay the CGT and move on with his profits.


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## Gus1970

orka said:


> Why are you so sure that we are all so sure that bitcoin investors don't want to pay CGT?



It's the title of this thread



orka said:


> BB has asked about one friend who is a bitcoin investor.



He says he met him at a crypto event, maybe they became friends straight away, i am not sure and I don't know how relevant it is.



orka said:


> And there are no easy decisions to not pay CGT. Revenue have rules and as long as you stick to the rules and report what you need to report, there is no 'not paying CGT' - it just doesn't arise. But it's not free - it comes at the cost of leaving your home for 3-4 years. That's too high a price (both socially and financially) for most people.



I will certainly pay CGT if i ever sell, never thought about not paying, the existence of this thread is troublesome to me, not the act of paying taxes.



orka said:


> I personally think BB's friend is mad to not cash in now, pay the CGT and move on with his profits.



bitcoin is not about profits for me, but we all have different needs to fulfil. I would not sell a satoshi if i was in BB's brand new friend


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## orka

Gus1970 said:


> It's the title of this thread


The title of the thread is not '(all) bitcoin investors want to move to IoM to avoid CGT'.  It's about one person.


Gus1970 said:


> He says he met him at a crypto event, maybe they became friends straight away, i am not sure and I don't know how relevant it is.


It's not relevant that it's one friend or one acquaintance or one really weird randomer.  The relevant word is 'one'.  Not all bitcoins investors - or most bitcoin investors - just one bitcoin investor doing a perfectly legal thing.  No-one was even saying anything judgy about a move to the IoM - just offering advice.  I'm not sure how you have perceived anti-bitcoin-investor bias with respect to the tax issue in the replies to this thread.


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## Brendan Burgess

It's perfectly legitimate for someone to legally reduce the amount of tax they pay. 

It's likely that this might well appeal to holders of Bitcoin because they have made very sudden and very large gains.  

It might also appeal to them because, on average, they would probably be younger and more tech-savvy.   So it would be easier for them to move abroad and to work remotely. 

Brendan


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## Gus1970

I must have misunderstood the intentions, i retract and apologise.

Best,

Gus


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## Gordon Gekko

Hi Gus1970,

There is likely to be a greater level of tax evasion amongst Bitcoin investors relative to the general population.

Is there any evidence to support such a slur?

Well, yes there is: Coinbase, the Bitcoin trading platform was the most downloaded app in the US last year. Yet only a tiny number of Bitcoin gains have been reported to the IRS, circa 800 from memory. The IRS has a taskforce looking at the issue.


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## TheBigShort

Hi Gordon

Is it possible, that despite the Coinbase downloads;

1) not everyone actually went and bought crypto
2) those who did may not have sold it yet
3) those who did sell may have suffered losses 
4) of those who did sell and make gains in 2017, when is their due date to register those gains? 
5) some are confused as to its actual asset class - perhaps adding it as 'other' or 'additional' income rather than declaring the sale of an asset.


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## torblednam

Gordon Gekko said:


> Hi Gus1970,
> 
> There is likely to be a greater level of tax evasion amongst Bitcoin investors relative to the general population.
> 
> Is there any evidence to support such a slur?
> 
> Well, yes there is: Coinbase, the Bitcoin trading platform was the most downloaded app in the US last year. Yet only a tiny number of Bitcoin gains have been reported to the IRS, circa 800 from memory. The IRS has a taskforce looking at the issue.



Or Gus could just pop over to boards.ie and have a look at some of the threads where lots of people implied or explicitly stated an intention to not pay tax on crypto gains... let's stick it to the man etc...


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## Gus1970

Gordon Gekko said:


> Well, yes there is: Coinbase, the Bitcoin trading platform was the most downloaded app in the US last year. Yet only a tiny number of Bitcoin gains have been reported to the IRS, circa 800 from memory. The IRS has a taskforce looking at the issue.



downloads > activations > funded > bought BTC > Sold them at a profit

Having runa a couple of startup myself I know very well that app download is a vanity metric we publish to inflate the impression of our success.
i used ">" as "greater than", I hope it is clear.

For example I have not sold a penny since I started buying in early 2013, I have coinbase, bitstamo, kraken, bitfinex, bitrex, kukoin and just about another 20 exchanges I use.
Not having sold makes me a tax compliant citizen, but looking at me with your parameters, I am 26 people that did not pay tax


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## Gordon Gekko

Typical of the nonsense propagated by cryptocurrency enthuasiasts.

In a country of 300m people with the most advanced economy in the world, circa 800 people were reporting cryptocurrency transactions.

The IRS were able to secure information regarding a tightened cohort of 15,000 users who were transacting at a level of $20,000 or more during the period that circa 800 people were making cryptocurrency-related tax returns. The non-tightened number of users was circa 480,000.

How anyone can contend that cryptocurremcies aren’t subject to widespread tax evasion is beyond me.


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## Gus1970

Gordon Gekko said:


> How anyone can contend that cryptocurremcies aren’t subject to widespread tax evasion is beyond me.



First, I didn't realise i was living in America, second, I do pay all my taxes and all the people I know owning crypto pay taxes, hence in my context of knowledge, I contend

Back at you o the "nonsense propagated"


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## Gordon Gekko

Gus1970 said:


> First, I didn't realise i was living in America, second, I do pay all my taxes and all the people I know owning crypto pay taxes, hence in my context of knowledge, I contend
> 
> Back at you o the "nonsense propagated"



Where was it suggested that you live in America?

Your anecdotal evidence in respect of your own position or that of your friends is completely irrelevant.

We have hard data regarding the biggest Western economy in the world; it’s reasonable to contend that it’s representative of other Western economies.


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## orka

Gordon Gekko said:


> Is there any evidence to support such a slur?
> 
> Well, yes there is: Coinbase, the Bitcoin trading platform was the most downloaded app in the US last year.


Coinbase was not the most downloaded app in the US last year - it wasn't even in the top 20.  For a brief window (days/hours?) at the height of the bitcoin mania, it was the most downloaded.  Across the whole year, the more likely apps (Snapchat, Youtube, Facebook, Whatsapp etc.) were downloaded way more often.


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## Gordon Gekko

orka said:


> Coinbase was not the most downloaded app in the US last year - it wasn't even in the top 20.  For a brief window (days/hours?) at the height of the bitcoin mania, it was the most downloaded.  Across the whole year, the more likely apps (Snapchat, Youtube, Facebook, Whatsapp etc.) were downloaded way more often.



Nitpick much?

In December, it reached No 1 on the App Store charts.

Is the contention that Coinbase is not that popular, or that 800 tax returns is about right?


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## orka

Gordon Gekko said:


> Nitpick much?
> 
> In December, it reached No 1 on the App Store charts.


You have a strange definition of nitpicking.  If you said the app was #4 and I pulled you up to snark that it was actually only #5, THAT would be nitpicking.  Saying it was THE #1 app (ahead of facebook, whatsapp, snapchat - quite an achievement) last year when it wasn't even in the top 20 was just incorrect - even if it had the briefest of brief stints on the top of the charts for a couple of hours/days as people downloaded it to have a look.


Gordon Gekko said:


> Is the contention that Coinbase is not that popular, or that 800 tax returns is about right?


The contention is that Coinbase was not the #1 app last year.


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## torblednam

Gus1970 said:


> downloads > activations > funded > bought BTC > Sold them at a profit
> 
> Having runa a couple of startup myself I know very well that app download is a vanity metric we publish to inflate the impression of our success.
> i used ">" as "greater than", I hope it is clear.
> 
> For example I have not sold a penny since I started buying in early 2013, I have coinbase, bitstamo, kraken, bitfinex, bitrex, kukoin and just about another 20 exchanges I use.
> Not having sold makes me a tax compliant citizen, but looking at me with your parameters, I am 26 people that did not pay tax



When you say you haven't sold, are you saying you've never bought/exchanged one crypto for another?

Because if you, for example, acquired a holding of a new crypto and paid for it using BTC, that is a disposal of BTC and subject to CGT (if the disposal realises a gain, which it would if you were holding BTC since 2013...).


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## Gus1970

torblednam said:


> When you say you haven't sold, are you saying you've never bought/exchanged one crypto for another?



Yes



torblednam said:


> Because if you, for example, acquired a holding of a new crypto and paid for it using BTC, that is a disposal of BTC and subject to CGT (if the disposal realises a gain, which it would if you were holding BTC since 2013...).



And i am aware, as you probably knew already


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## Gus1970

Gordon Gekko said:


> Where was it suggested that you live in America?
> 
> Your anecdotal evidence in respect of your own position or that of your friends is completely irrelevant.
> 
> We have hard data regarding the biggest Western economy in the world; it’s reasonable to contend that it’s representative of other Western economies.



Sorry Gordon, I had actually misunderstood your message. I messed it up, you are right


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## Gordon Gekko

orka said:


> You have a strange definition of nitpicking.  If you said the app was #4 and I pulled you up to snark that it was actually only #5, THAT would be nitpicking.  Saying it was THE #1 app (ahead of facebook, whatsapp, snapchat - quite an achievement) last year when it wasn't even in the top 20 was just incorrect - even if it had the briefest of brief stints on the top of the charts for a couple of hours/days as people downloaded it to have a look.
> The contention is that Coinbase was not the #1 app last year.



Coinbase reached #1 last year.

Coinbase was for a period the number one app in the US.

You are now straw-manning with regard to the main point which relates to tax evasion.


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## torblednam

Gus1970 said:


> And i am aware, as you probably knew already



You really should head over to boards.ie and have a look at the few threads there about cryptos and tax... my impression of the tax compliance attitude of people dabbling in cryptos is largely informed by  what I've read there.

If you read the comments there you'll discover that an awful lot of people appear not to be aware, or are intending to choose not to be aware, of what constitutes a disposal of a crypto asset resulting in a CGT event.


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## Gus1970

torblednam said:


> You really should head over to boards.ie



I will take your word on that, but we are not all the same. I always pay all my taxes and I don't see any reason why I shouldn't pay CGT whether on stock or crypto profits.


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