Hi y'all. I'm looking for your experience with offramping crypto into Australian Dollars.
I'm going to be moving down under soon and am going to need to move some funds for living to an Aussie account.
Looking to avoid wire transfer fees or even using something like Wise (which is my backup option.) It feels like a USDC > AUD transfer should be totally possible with how long crypto has been around now. And I know I can get USDC onto a variety of chains for free via Coinbase.
So far I'm wondering if Coinbase does the same thing on the Aussie side and I could maybe just open an Australian Coinbase account and offramp that way.
Does anyone know the best way to get the $$ off chain in Australia? Also, am I setting myself up to get flagged for money laundering or something if I do it on crypto rails? My plan is to do it as cheap as possible, and legally.
Thanks in advance for any advice!
Independent reserve is the one that are aus and nz based https://share.google/DHJ36hcgsKfY0Ghgo
Spend the money and ask an accountant specialising in international finances
Your best bet is to get it out before you move to AU and then transfer via wire or some other more conventional way.
Do you already have acc in any AU bank? If not then that would be your first goal
Banks in AU are very wary of crypto even for residents/citizens. People constantly reporting their accounts being flagged for AML. There’s also a lot of KYC requirements.
Be aware of the moment you are on AU soil whatever crypto you withdraw is subject to capital gains tax.
My savings that I hold in USDC would be considered a capital gain if I withdraw them in Australia? That makes no sense to me. (Edit: no sense as in how could I possibly calculate a gain or loss when I’m opening the “position”, i understand taxable events)
USDC has no special status. It is a cryptocurrency and therefore its disposal (changing to fiat) is a CGT event. You can easily google that yourself on ATO website.
The fact that it “makes no sense” to you means you don’t understand taxation rules of the place you intend to move to. I suggest that you get familiar with that first. ATO rules are no secret and accessible for free online on their website.
Right and fair dues I’ll have to do some reading. I guess my confusion is around the presumption of a capital gain. my cost basis is exactly the same as what the usdc is worth. Even if the disposal of the USDC is a “taxable event” I have not made a capital gain by US tax law since 1usdc = 1usd. so I’m surprised to hear Aus law could be so different.
I’ll do some reading. Merry christmas by the way and cheers for the response.
You do trigger a cgt event even in us, but if you sell your USDC for USD and to US bank account, the tax on that would be 0 since no gains. FYI Australia uses AUD, not USD, and exchange rate to USD is not fixed, so you do trigger CGT event and it will be either gain or loss depending on where the exchange rate goes. And any legitimate exchange reports transactions to ATO if you link it to AU bank account, or otherwise mark Australia as your place of residence which you will have to to be able to send money to AU bank account from exchange. Which is why I said you are better off exchanging it before moving and then use conventional wire transfer to send it to your acc in AU (which you also can open only after landing here).
Really trying to work out how I could calculate what the gain or loss would be when swapping from USDC to AUD. It feels to me like that would be opening the position, not closing it. So no gain or loss could truly be calculated until I swapped back or perhaps to a different asset.
Maybe it’s just easier to use Wise
If AUD is your local currency you are not opening a position. You are just closing a USDC position by selling USDC.
USD and therefore USDC has been dropping against AUD so you potentially have capital losses.
To calculate it just the proceeds, what you received in AUD when you sold or the AUD value of the asset you sold for minus the cost basis, which is what your paid in AUD to buy the USDC.
Eg you bought 1000 USDC for $1550 AUD so your cost basis is $1550 AUD
When you sell the 1000 USDC say you receive $1500 AUD
That means proceeds ($1500 AUD) - cost basis ($1550 AUD) = -$50 AUD
So in that example you have $50 AUD in capital losses you can use to offset any gains that year.
If you use Wise there will also be a capital gain or loss since you are getting rid of USDC.
Edit: If AUD isn't your local currency and where you are taxed then swaping for AUD is opening a new position, you are just closing a USDC position too. So gains or losses apply to selling USDC for now. The proceeds for your USDC is the value of the AUD your receive in your local currency.
If you are travelling to Australia and spend the AUD say on a holiday your home nation may have no capital gains or losses to worry about on the AUD, as spending currency you bought for a holiday can have special provisions. So just capital gains or loss to worry about with USDC
Right but this money has been in USDC for literally several years, long before i had any tax relationship with Australia or the ATO.
So in theory you’re saying that to calculate my cost basis on these USDC I would need to go back several years and look at what the exchange rate from USD to AUD was at that time?
I think I’ll just swap whatever $$ I will need back to USD before moving over there, and then use traditional rails to move that USD to AUD. and avoid the whole mess.
If you had no relationship with the ATO then of course no tax, but that means you are a tax resident of somewhere else who may want to.
If you recently became a tax resident of Australia the cost basis for the USDC is the simply the AUD value of the USDC on the day you became a tax resident. (This perfect for someone who wants to avoid all their current unrealised capital gains If your leaving somewhere who won't force a deemed disposal)
So if you become a tax resident then sell, you will have no gains or losses as that might be the same day.
It will be the same if you bring USD then sell, the best advice depends on your situation. The good news is all your previous previous unrealised capital gains are completely avoided depending on your exit tax/deemed disposal in your home nation.
If you are wanting to turn the USDC and USD into AUD, then it's probably easier to just sell USDC for USD, and manage that with your home nation tax, then do your USD to AUD in one go.
After moving to AU there’s a grace period during which incoming wire transfers from foreign banks are considered non-taxable as you are moving your funds with you. But I highly doubt same would go for crypto savings. DYOR here.
The tax on any FX exchange (which also happens during wire transfers) after that grace period is calculated based on the difference of value from the moment you became a resident until a disposal event. Presumably you know which day you landed, and at which rate you sold USDC, so you can work that out then.