8 figure crypto exit strategy - UK edition

[Silvio]

Good luck!

Have you thought of using EMIs︋ for sending\receiving from crypto exchanges and them sending from\to the normal bank accounts?
This way︌ you don't directly send crypto to banks that don't like crypto, and raise no flags.︍

It's common to have transactional bank accounts just for wires to\from 3rd parties and then︎ solid bank accounts for storing wealth\investments, which usually hate 3rd-party wires.

 

[oiernfoiuebnf]

The issue is during account opening⁣ they ask you what your total wealth is and where that came from, not just⁢ the initial deposit to open the bank.

So far the initial deposit I’ve said I’ll︀ be making just comes from savings from my previous employment (which I have payslips to︁ show for example).

For your case to work I’d have to lie to the bank︂ which I’m not going to do.

 

[BoomBoom]

If you fail to open local bank account you should try swissquote. They can issue‌ you a credit card with gbp/eur/usd directly, so you can at least spend your crypto‍ money at that way.

 

[oiernfoiuebnf]

Another update. I was rejected for Barclays priority banking in Jersey as they have “no‌ appetite for any clients who have above a certain % of their wealth deriving from‍ cryptocurrency”. They were apologetic and agreed I was very low risk but theres basically very⁠ little reward to them as priority banking is free and they guessed I wouldn’t leave⁤ a huge balance there, it would mostly be for the odd transaction. They would however⁣ accept me for private banking (£5m+ to invest).

In the meantime I successfully opened GBP/EUR/USD⁢ accounts at SEBA bank in Switzerland which has been great and the KYC process was︀ fine (they’re knowledgable about crypto so I could prove all my purchases easily).

I’m a︁ bit concerned about the fact seba is quite new and linked quite heavily to crypto︂ so who knows if they’ll be around in 10 years (the whole reason I’m cashing︃ out 50% of my crypto is to diversify away from the ecosystem) so ideally I︄ would have the best bank I could get and put a big chunk of money︅ there to invest.
Can people recommend the best private banks in the world to deposit︆ £5M+? So far I’m thinking Barclays in Jersey, big private banks in Switzerland or big︇ private banks in Singapore. Need to be crypto friendly and stable with not gigantic fees.︈

 

[TravelAfficionado]

Thanks for providing updates.

Personally I wouldn't want to leave a lot of cash in‌ a private bank or invest with them due to their high fees. Better to invest‍ through one or more low-cost brokers: IBKR, Swissquote, Saxobank, etc.

Nevertheless, I can understand that⁠ in your situation you might want a relationship with a private bank to facilitate the⁤ flow from crypto to stocks, and so you may be willing to incur the fees.⁣

Have you tried HSBC in Jersey? I believe many of the big HNWIs in Jersey⁢ bank with them. Also, sticking with a Jersey bank helps demonstrate you're resident there. That︀ said, I also know HSBC can be rather bureaucratic at times.

--

Also, separately, do︁ you know yet what social security contributions you'll be paying in Jersey? As you're not︂ working, it'll be class 2 contributions, which are "12.5%"... but on what income?... presumably your︃ staking income plus dividends from the stocks/ETFs you'll be buying? I'm wondering how the tax︄ authority will calculate this.

https://www.gov.je/Working/Contributions/Payments/pages/aboutcontributions.aspx
This link says: "If we don’t hear from you, your︅ contributions bill will be £1,019.50 per month January to December in 2022." This amount looks︆ like it's basically the cap on class 2 contributions. So probably you'll be at this︇ cap, so your income level doesn't matter... you'll just pay £1,019.50 per month.

 

[oiernfoiuebnf]

I do have an account with IBKR under my Jersey address and would like to‌ use that to invest on and for any currency transfers because it’s much cheaper. As‍ you say though it’s more about being able to keep a bank account open for⁠ transactions and it seems like risk/reward is not worth it for non private banks to⁤ provide this. So I have to be willing to put 1-5M into a private bank⁣ and take some more fees.

HSBC is the most anti crypto bank in the world,⁢ they don’t even let their clients hold microstrategy (MSTR) because the company holds a lot︀ of btc on their balance sheet. So they’d never open an account with me.

Good point on jersey residency, I’m leaning towards Barclays PB in Jersey for this reason +︁ their fees are the most reasonable out of any PBs I’ve see. (Capped £1200 a︂ year fee for custody and most everything else is free).

On social security I need︃ to get some more advice on this, but you don’t have to pay it for︄ the first 6 months after becoming resident. It’s also calculated by how much you earned︅ 2 years ago so need to understand if that applies to my U.K. income 2︆ years ago. I think generally it’s 12.5% up to that cap of 1k a month︇ but if you have a lower income then it scales down - need to check.︈ Otherwise if you just had a very low self employed income of say 15k a︉ year then you’d have to pay 12k tax still? Doesn’t seem right.

I actually have︊ 0 income right now, I was staking solana (SOL) while in the U.K. and liable︋ for income tax on it but after moving to Jersey I swapped it for mSOL︌ (no cap gains tax payable) which rather than giving you new tokens for staking it︍ accrues the staking reward value to your existing static number of tokens which means it’s︎ an unrealised gain and I can just sell a small amount each month if I️ wish tax free. I also have no stocks that pay dividends.

 

[KDX]

Have you tried outright just going straight to private banking? Make it clear you will deposit⁠ millions etc. That might make their risk appetite a bit larger. I'd still contact HSBC⁤ just in case.

 

[boomy]

you will need to have a lot of documents‍ with you if you are going to do that. Better arrange with a tax consultant⁠ and lawyer too.

 

[TravelAfficionado]

On the banking front, I agree with @KDX that it's worth contacting HSBC private banking‌ directly to check. But otherwise Barclays is a good option for a very reasonable fee.‍

Regarding income, that's some nice structuring! I believe Jersey previously taxed accumulation investment funds based⁠ on a "notional interest" of 1%, but I believe they no longer do this as⁤ it wasn't worth the hassle. So you should be good to invest in accumulating ETFs⁣ (as well as non-dividend paying stocks).

However, while zero income is probably fine from an⁢ income tax perspective, I really wonder how this will work for social security. It seems︀ you can apply for "Low Income Contribution Relief", which disqualifies you from getting benefits in︁ the future (not that you'd need them!). Or maybe it's as simple as 0 x︂ 12.5% = 0. However, I know that in some countries the authorities expect some minimum︃ contributions from working age adults. So it could be better to pay 12.5% of something - in which case maybe buy a few dividend-paying ETFs/stocks? (Or get some consulting income︄ or rental income, but those could be tricky given you don't have the right to︅ work or own property in Jersey itself.)

(P.S. This is all very interesting to me︆ as I might consider Jersey residence in the future.)

 

[oiernfoiuebnf]

I think I’d rather just go for any other private bank than hsbc to be‌ honest, unless there’s anything particularly good about them. Fun fact they’re the only bank in‍ Jersey that is under their U.K. structure which means they’re the only one that provides⁠ credit cards (Jersey has a strange law prohibiting jersey banks from allowing credit cards so⁤ barely anyone has them).

For social security yeah maybe it’s better to have a small⁣ income of say 10k a year and that might actually reduce the tax compared to⁢ 0 income.

I’ve said this stuff earlier in the thread but I think Jersey is︀ only a good option for quite a niche set of people because unless you get︁ a job in demand or go through the HNWI plan (and pay 100k+ tax pa︂ flat) then you’ll be non-qualified/registered status and only have crappy housing available so it’s only︃ useful if you want to be out of the country quite a lot like I︄ do.

After being in Jersey for a bit here’s some more pros and cons:

Pros:
- very low crime
- low taxes
- stable politically
- Minimal bureaucracy
- All︅ the houses, streets and other infrastructure is just good quality and made out of nice︆ materials
- No VAT (5% sales tax only on stuff above £135) so everything online︇ 15-20% cheaper than U.K.
- Great food and restaurants, Michelin stars
- London only 45︈ min flight away
- Government are pro crypto

Cons:
- It’s very boring and small.︉ I wouldn’t mind as much if I had a family and an established group of︊ friends but for a single guy in my 20s used to London or travelling abroad︋ it’s kinda painful to be there for too long.

 

[TravelAfficionado]

I've visited Jersey a lot and largely agree with your pros & cons list. Also,‌ the climate is fairly pleasant and it's good for water sports (motorboat, sailing, surfing, etc).‍ But I often get a claustrophobic feeling when staying there, especially inland with the narrow⁠ roads boxed in by walls and hedges. The key is to get off the island⁤ as much as possible.

I will spend a few weeks in Jersey as usual this⁣ spring/summer. Open to meeting up if you want (I'm in my 30s).

 

[Jmeery1]

This is interesting! Do you know of any similar staking reward⁢ accrual for BTC or ETH? It seems to me like receiving staking rewards usually means︀ higher taxes as income rather than capital gains

 

[oiernfoiuebnf]

I’m looking forward to trying surfing and maybe sailing in the summer when the weather‌ is better. Up for meeting up then.

@Jmeery1 I don’t know of any comparable staking‍ methods for other blockchains than solana which keep the token number static so it’s an⁠ unrealised gain rather than income of new tokens. For btc there’s no staking at all⁤ as it’s proof of work not proof of stake but if you lend it out⁣ (on ledn.io or crypto.com) you have to pay income tax on it. I’m dubious the⁢ reward is worth all of the risks to lend out bitcoin though. You’re taking on︀ credit risk, counterparty risk, hacking risk, regulatory risk on an asset with no lender of︁ last resort for 2-3%.

 

[Battura]

If you don't want to waste your 20s living on a boring island why not‌ move to Australia?

Pros:
* Under 30s from UK can easily get a working holiday‍ visa for 1 year + option to renew for 1 year
* No taxes on⁠ anything derived outside of Australia if you're not a citizen, including capital gains
* Crypto-friendly⁤ banks, no problem cashing out big on local exchanges
* Good access to trading platforms⁣ and investment products
* Good weather and lifestyle
* Nice houses, great food and restaurants⁢ in the big cities
* Not a shady tax haven

Cons:
* You will need︀ to change visas and find a different way if you want to stay longer, but︁ you will be rich enough by then that you can find a nice solution
* Not a 45 minute flight from London

 

[oiernfoiuebnf]

I don’t need to stay on the island, I only need to spend 1 day‌ a year on it to remain tax resident. In practice I’m happy to spend a‍ month or so there in the summer but it doesn’t have the 183 day stay⁠ requirements like most other countries. I’m currently not in the country and travelling wherever I⁤ like.

Also Jersey is not deemed a shady tax haven, it’s deemed a ‘low tax⁣ jurisdiction’ and is very strict on aml/kyc. It’s not on the EUs or any other⁢ grey/black lists.

Australia seems like a nice place to visit but I don’t think I’d︀ want to live there at the moment, especially after how draconian they were with covid︁ (couldn’t leave the country for nearly 2 years, Melbourne had a 1 year stay at︂ home order lockdown, longest in the world).

Maybe something to consider in the future, I︃ have friends who live there and liked it pre covid.

 

[Battura]

Didn't mean to suggest Jersey was shady, only that Australia is not perceived as a‌ tax haven. Good that you only need to stay 1 day, sounds like a great‍ option for UK citizens.

 

[Verbatim]

Australia has territorial︃ taxation? I find that hard to believe.

 

[backpacker]

dev56"""eek¤%& Wrong!
Read and study the details:
https://www.ato.gov.au/Individuals/...you-must-declare/Foreign-and-worldwide-income

 

[JohnnyDoe]

Battura said:
If you don't want to waste your 20s living on a boring island why not move to Australia?

Pros:
* Under 30s from UK can easily get a working holiday visa for 1 year + option to renew for 1 year
* No taxes on anything derived outside of Australia if you're not a citizen, including capital gains
* Crypto-friendly banks, no problem cashing out big on local exchanges
* Good access to trading platforms and investment products
* Good weather and lifestyle
* Nice houses, great food and restaurants in the big cities
* Not a shady tax haven

Cons:
* You will need to change visas and find a different way if you want to stay longer, but you will be rich enough by then that you can find a nice solution
* Not a 45 minute flight from London
Click to expand...

Another small cons: n**i government that arrests people not wearing a mask.

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[Battura]

Yes, if you are a 'temporary resident' which a working holiday visa holder would be.‍

The problem with⁠ doing your own research is that you might miss something: Foreign income exemption for foreign⁤ residents

People on this forum happily hand over blood samples to the government⁢ to get their Emirates ID to be able to commit financial crimes in an actual︀ authoritarian police state known for locking up people who commit financial crimes indefinitely. What makes︁ you think they care about 'n**i' governments? Or that they're so dumb that they won't︂ voluntarily wear a mask during a pandemic?