This week I registered an account with KuCoin due to that is where the COTI staking is now heading with an APR of 18%. This is too big to ignore and enables my stake to continue growing until the time comes around to sell whenever that might be. I am not overly pleased with this option as this is on an exchange and the saying not your keys not your crypto is ringing loud and clear at the back of my head.
When registering this week I had the option of choosing which country my KuCoin account will fall under as I have duel citizenship. Being born in the UK I have a British passport and being raised in South Africa also have a South African Passport. My brother and I are currently applying for the EU Passport as my dad and grand parents were born in Ireland and having 3 different passports will be every beneficial with travelling and also when holding crypto. There are options which helps when deciding how to play this as the taxes vary quite dramatically and difference in percentages could be substantial amounts depending on how well the portfolio performs.
Selecting the UK for the KuCoin account was a no brainer knowing how the South African Revenue Services (SARS) has been actively looking how to regulate crypto from a tax boost revenue angle and not from a realistic fair angle. I will be changing my details with Binance as this was not really a big thing over 8 years ago and times have changed.
This may be a big deal in the next two years and I am certain it will be and why I have hunted for an off ramp not using an exchange. A crypto off ramp using an exchange direct to a bank account is going to be too easy for the authorities to trace so we have to dance in the shadows finding alternative routes.
When looking at the South African versus the UK crypto taxing rates it becomes clear and obvious which one is the lesser of the two evils and the long term plan is to use an EU alternative once the EU passport is in my possession. We shall see how this plays out as things can change so quickly but the important part here is there are alternative options available and not being stuck with one.
Both the UK and South Africa view crypto very similarly as a personal asset or financial instrument. The taxable invents which are fairly obvious is selling crypto for FIAT, exchanging crypto for another crypto, receiving crypto as payment and mining rewards. Mining rewards I presume would also include staking rewards because there is a similarity with this.
South Africa you are taxed at a rate of 40% for Capital Gains Tax (CGT) and you have a R50K exclusion rate which is roughly $3K. The UK has a18% or 24% CGT rate depending on what bracket you fall into and knowing how much crypto we have been accumulating we must always consider the higher tax brackets and not be fooled by the lower tax band.
Both the UK and SA have a maximum tax band set at 45% for those trading regularly and staking and this is predominantly where my portfolio lies as the bulk is earned via staking or earning rewards like we do on HIVE which is or could be considered another form of mining which it is. Giving away 40-45% of my portfolio is not on the cards and why alternative routes need to be discovered to protect the overall values of the work taken over the last 8 or how many years it will be before off ramping.