‘Plan B Passport’ Helps to Avoid Hefty Crypto Tax via Second Passport
Every one who has made money from cryptocurrencies would like to avoid onerous capital gains taxes after spending or selling the coins following boom cycles. There is a service that caters for this.
Bitcoin advocate and entrepreneur Katie Ananina helps bitcoiners who have made significant gains on their BTC holdings to legally avoid such taxes by obtaining a second passport through her company Plan B Passports. It offers clients seven different passport options for nations with favorable tax regulations, including credentials for Portugal, Saint Kitts and Nevis, Saint Lucia, Grenada, Antigua and Barbuda, Dominica and Vanuatu, CNBC reports.
Obtaining a passport to one of these countries gives someone the opportunity to bypass heftier capital gains taxes required by countries like the U.S.
This is made possible by partnerships that Plan B Passports has acquired with governments’ residence- or citizenship-by-investment programs. Plan B Passports’ customers find a way to avoid paying major bitcoin taxes, while the countries that furnish the new passports receive a new stream of foreign investment.
“In Saint Lucia you can obtain citizenship by an investment of between $100K (donation), $250K (government bonds) or $300K (real estate),” an attorney with international tax law firm Andersen, Ernest Marais, explained via email to CNBC.
Ananina shared that the average cost for these passports range from $130,000 to $180,000.
“It’s basically a donation into the sustainable growth fund of the country,” she told CNBC. “So, clients make a $100,000 or $150,000 donation, plus some due diligence fees, government fees, and then $20,000 for my legal fees.”
These donations can also be very beneficial to countries that don’t have many natural resources, and can then allocate those funds for what they need.
Buying bitcoin when it’s price is low and holding it until the price rises is an accomplishment to be proud of. When Bitcoiners finally decide to part with some of their sats to purchase goods or services, they don’t want to pay capital gains taxes. Ananina has done that herself, and wants to help others who don’t want to pay taxes on these gains to governments that she feels don’t deserve them.
“I was smart enough to figure out that $200 in bitcoin will be worth $100,000 at some point,” said Ananina, according to CNBC. “I don’t think the government should have 40% of that.”
Ananina also said that her business is booming, and that she’s booked out three weeks ahead for consultation calls. And it seems likely that as bitcoin’s price once again approaches new all-time highs, we’re only going to see more people searching for capital gains tax relief.
How the whole thing started
Ananina isn’t your stereotypical bitcoin maximalist, a phrase used to describe people who believe that bitcoin, and not necessarily other cryptocurrencies, is the future of finance.
Born and raised in Chelyabinsk, a city in central Russia, 90 miles north of the Kazakhstan border, the former professional sailboat racer moved to the States in 2016 after landing a green card, thanks to her status as one of the world’s top sailors.
Five and a half years ago she spoke no English, but you’d never know it to meet her.
For Ananina, the appeal of bitcoin was laid bare when she saw the Russian currency drop 50% during the two months she was living in Spain while competing for the Russian national sailing team in early 2015.
“My macroeconomics professor wasn’t able to explain that to me. There was no chance I could run my equations and figure out what happened there,” she said. “I realized I wasn’t happy with how money works.”
So began Ananina’s days as a bitcoin evangelist.
But being a bitcoin maxi isn’t just about believing in one currency, according to Ananina. She believes whole-heartedly in jurisdictional arbitrage, which, to her, means ditching any one government’s rules over her actions and finances, and going to the place that suits her best at the moment.
“If the government starts affecting me, I will take all [my assets] into my hands and go elsewhere,” she said.
This is the mindset that led the 26-year-old entrepreneur to start her own company designed to help others do just that. Ananina says that several bitcoiners she knows who have held the cryptocurrency for over one boom-and-bust cycle are thinking about getting a second passport as a way to avoid paying capital gains taxes on their holdings.
