Tax Me Up

Tax.

There’s no way around it…

Or is there?

Recently, I’ve had to switch to a new accountant here in Australia, which has thrown up all sorts of insightful conversation.

Why change?

Well I had to.

The previous one was friends with my ex-business partner, and I was concerned about privacy, so I was keen to find someone I could trust.

No need to let anyone in on my private business dealings unless I have to!

After a few messages to some friends, I had a list of names, and a bunch of decent references.

Word-of-mouth.

Old school.

Somehow it felt better than a simple online search.

Seeing as this was now my 4th accounting firm in 4 years here, having never truly settled into a happy relationship with one, I wanted to invest more time and energy in getting it right on this occasion.

Importantly I wanted them to have a grasp of Bitcoin.

Anyways, I made my choice, and so far so good.

Shout out to Peter and his team for their work so far.

What’s fascinating though is what this has dragged up.

Complexity.

Lots of it…

• What tax returns have been completed?
• What was your income?
• What was your capital gain?

Urgh…

I hate this stuff.

Indeed, often, emails from accountants will sit in my inbox awaiting action for weeks at a time.

Procrastination is rife…

But no.

Come on Jake.

Get your head around this!

So, re-invigorated, I dove back in…

I pulled together all the information I thought they needed, attached multiple documents to an email, and sent it through.

Then they needed more.

Then they didn’t understand what I’d sent.

Then they required an introduction to my previous accountant.

FFS.

Why is this so hard?

Again, I resolved to get on top of it all.

The truth is, things were a bit of a mess, and there was only one person to blame:

Me…!

So I went back to the spreadsheets I’d created, made sure they were more detailed than before, and fired off another email with supporting attachments.

Surely they’ll figure that out.

Surely…

Surely…?

A few days roll by.

I wonder how long it will take?

Preferably I have an answer soon.

Shit, this is taking a while…

You get the point.

Ultimately, this ended in a 2 hour meeting in their office yesterday, to iron things out.

Which we’ve now pretty much done!

Why tell you all this?

Well it stirs up so many questions in me.

• What is tax?
• Why pay tax?
• When is tax fair?

Fundamental questions that we don’t spend enough time considering, have to refer to an “expert” to navigate, and don’t produce the most compelling of answers.

In my case, the complexity of the accounting discussion was driven by:

• I entered Australia with foreign assets which had to be valued
• I’ve since made disposals of foregin assets for a capital loss
• I need to manage the tax implications of an un-crystalised capital gain
• I am trying to move assets into an Australian discretionary trust efficiently
• I received some poor advice in the past that was in fact incorrect
• In May a foreign trust I am a beneficiary for will crystalise a capital gain
• We are considering a move overseas in 18 to 24 months

After a productive meeting I believe we are now on the right track.

But it’s left me clear on one thing for sure.

Navigating the modern world of fiat fuelled nation state taxation is a shitshow.

• It’s complex.
• It’s expensive.
• It’s time consuming

“Don’t make decisions for tax reasons”.

Is the common wisdom.

But when you end up in these deep discussions with industry experts, you can’t help but wonder how much simpler life would be if you upped sticks, and took your business elsewhere.

Less headache.

Lower taxation.

There’s a lot to like about jurisdictional arbitrage.

Anyways, that’s another rabbit hole in itself.

We’ll save it for another day.

To wrap up: invest time in finding a good accountant!

Best,
 Jake

Ps - when my father died of a sudden heart attack, I was just 20 years old, and I was thrown into a position of financial responsibility far earlier in my life than usual. I had to manage an inheritance. Over the years I’ve dealt with tax experts, financial advisers, lawyers, brokers, you name it, and I’ve had some kind of interaction with them. The upshot: managing wealth in today’s world is a complex job. After all this, one of the reasons I am so bullish on Bitcoin, is it’s simplicity. A bearer asset, that cannot be debased, that you own, with next to zero opex; managed with a set of digital keys. You can still leverage traditional tools such as wills, trusts, and offshore companies, but at the end of the day, if you don’t have the key, you don’t have the wealth… Simple.