[charlesdm]

Is capital gains tax payable on those coins? If I were in your place, I would probably attempt to find a way to realise that gain (i.e. by relocating to a tax friendly country for a while) without having to pay capital gains tax. Make sure to not throw away your windfall.

[zen_boy]

In Finland, the capital gains on cryptos are realised once you sell them for floating currencies (ie. USD or EUR). We pay 34% tax on the profit.

For example, I'd pay (1M€ - 20k€) x 34% = 333k€ of taxes on capital gains. I'm not sure how the taxation works if you try to dodge it by relocating to a more tax friendly zone. I've heard some horror stories about Finnish companies moving to Estonia for tax benefits only to be taxed with fines for the gains that the company made while it located in Finland. Would the same rationale apply for personal capital gains?

You can freely trade between cryptos, for example between BTC and ETH, without triggering the capital gains. The moment you leave cryptoland, I believe they use the first-in-first-out (FIFO) principle to calculate the profits.

[charlesdm]

In Belgium (where I live), these gains are tax free. So that is one country you could potentially move to to avoid the tax. The same applies for the UK, Malta, Cyprus (non dom regime) and Monaco. If I were you, I'd consider doing the perpetual traveler thing for a while (i.e. while having a base in Malta, which is cheap) and cash out + reinvest in stocks. After a few years, move back, and then pay capital gains tax on those future gains.

You can leave most countries without realising the capital gain, even if you've built it up within a country. This is why certain people move to a country without capital gains tax to sell their company. Obviously I don't know Finnish tax law, but within the EU it's generally the case (for now). Have it checked by a _GOOD_ tax lawyer, if that's what you want to do.

Building up capital is important - once you have it there's a lot you can do.

[zen_boy]

Wow, this advice is very valuable. I'll definitely investigate. Thank you.

Another interesting discussion is the ethical side of things. I do feel some obligation to pay back to my home country for things it has provided (free education, healthcare, etc.), many of which were financed with tax income.

But paying the whole amount from current and future gains would be tad too much. Also, would it be possible to achieve higher and more direct impact with dodging the taxes and distributing that money via philantrophic means? Just some questions I'm thinking about in the whole picture.

[charlesdm]

1. If you intend to move back at some point, it doesn’t matter. Say you generate €75-100k a year from that million in the future, you’ll be paying 25k a year in taxes anyway. The more capital you have, the more you can generate, hence the more tax you can pay in the future. Pay 333k now vs 25k a year over the next 50 years. But building that first €500k-1m is hard, imo.

2. Always give back. For example, I gift €X,000 every year to local good causes. Yep, I get a 45% tax deduction for it, but I also use it as a way to give back. You’re not going to spend one euro to save 45 cents in tax, if it's not something you believe in.

You can also give back by investing in Finnish companies.

3. If you’re interested in Belgium (low cost of living, high quality of life, free health insurance, relaxed society, high taxes but not on capital), I can intro you to my tax lawyer. He’s awesome.

[zen_boy]

Great points. Ultimately, it seems to boil down to deferring tax to the future instead of the present resulting in higher gains for everybody, and having the freedom to choose on how to give back. Both of which seem like the obvious after further consideration.

I'm really curious about your story. Would you be interested in continuing this discussion over email?

[charlesdm]

Sure! E-mail address is on my HN profile.

[desdiv]

>This is why certain people move to a country without capital gains tax to sell their company.

Do you happen to have an example of this?

[charlesdm]

The easiest example I could find: http://www.dailymail.co.uk/news/article-1132957/Piers-Morgan.... But there are plenty of these stories if you go looking.

Note: this does not apply to Americans, because they are taxed based on citizenship, not residency. But even within the US you can save taxes by moving states (i.e. by being based in Texas or Seattle when selling your company, vs California). I believe Mike Arrington did this.

Another example: - http://newsfeed.time.com/2012/12/10/cest-it-aint-so-gege-fre...

[desdiv]

From your second link:

>Speculation is rampant that the move has allowed Depardieu to shift his legal residence to Belgium to dodge the 75% tax on income over $1.27 million that Socialist President François Hollande will apply as of 2013 as part of his response to France’s debt crisis.

Two things stand out:

1. Depardieu is avoiding a hit on his future income. The story is from 2012 talking about a future French tax hike in 2013. Avoiding tax on past income i.e. unrealized capital gains would be much harder I believe.

2. The story doesn't mention capital gains at all. I'm specifically interested in cases where people have successfully avoided a capital gains tax.

[charlesdm]

As long as the country you live in does not levy an "exit" tax of some sorts (on the individual, not the company), you should be able to move. Only the individual shareholder is moving, you are not moving the company abroad.

This is a relevant article: http://www.bloomberg.com/news/articles/2001-07-22/if-youre-w.... It's from 2001, but still relevant today.

Another article, specifically on Belgium: http://www.bespaarbelastingen.be/algemeen/belgium-tax-haven/

Third: http://www.wealthprotectionreport.co.uk/public/704.cfm

This law does not just apply on the disposition of shares, but on nearly all types of assets, with the exception of property.