Australia's 47% crypto tax hike has investors packing for Singapore

Australia's looming crypto tax crackdown is already pushing people out the door. From July, the top rate on real, long-term crypto gains climbs to 47%, minus the effect of inflation on the original cost basis. That's a big enough bite that Fred Schebesta, founder of Finder.com, has decamped to Singapore to become a tax exile, according to ct.com.

He's not alone. Ben Simpson, founder of crypto advisory Collective Shift, says members have already bolted. Some have packed up and left, telling him in blunter terms that they're off to the Bahamas. The pitch is obvious: Singapore, Portugal, Malta, the UAE and Hong Kong all charge 0% capital gains tax on long-term crypto gains, part of a deliberate play to lure wealthy investors.

Not everyone thinks it's worth it. Andrea Yuen, CEO of Sywftx, spent 30 years in Singapore and admits she misses paying no CGT — but says she didn't move back to Australia chasing tax breaks and wouldn't build a life around them. Simpson looked into leaving too, since he already spends half the year in the US running Collective Shift US, and the rules killed the idea: you have to sever ties with Australia, and with your healthcare, and stay away for most of the year.

Then there's the exit tax. Adrian Forza, director of Crypto Tax Australia, warns that Australia taxes you on the way out, catching anyone sitting on large gains the moment they leave. Roger Ver found out how serious that gets — the man known as 'Bitcoin Jesus' gave up his US residency in 2014 and was arrested a decade later for failing to properly report his crypto holdings and pay exit taxes, ultimately paying almost $50 million to make it go away. Forza notes you can defer, but then you're taxed on the full gain when you eventually sell — so if you expect Bitcoin to keep climbing, paying up front is cheaper.

Simpson, 27, isn't locking his portfolio in an SMSF until retirement either. He trades and holds through a company to cap gains at the 25% company tax rate, saving up to 22% versus CGT every time he exits a position and leaving more capital to redeploy. The catch: pulling money out means topping up to your personal rate — 47% at the top end — and low-volume traders can get slugged 30%. Setup means ASIC registration, an annual fee, an accountant and payroll admin.

On the investment question, Simpson argues the tax pain is still worth it. Crypto took a hard hit from the changes, which swap the 50% CGT discount for an indexation allowance that merely measures your real gain after inflation — so ditching crypto for ETFs won't dodge much. JPMorgan assumes Bitcoin compounds at roughly 10% a year on average. Simpson points to his younger sister, a low-income basketball player he persuaded into Bitcoin two years ago, now up 40% to 50% and eyeing a house deposit. Yuen's take is simpler: if you've made profits, be glad you owe tax on them.