12. Cryptocurrency – Taxation

At the moment Bitcoin may not be on the Tax Office’s radar in your country. Don’t bank on it remaining that way too long. Bitcoin is still experimental and new improvements are happening all the time.

As it increases it’s user base, it’s only a matter of time before all Tax Offices have legislation to enforce taxes of Bitcoin transactions. Remember all transactions are recorded and displayed openly, right back to day one. That could create a hefty tax bill further down the track. I’d think about paying the correct taxes today.

A handy trick for any business is to extract an amount to be withheld for taxes but take 20% of it and invest it in p2p funding finance. By the time the tax is due, half of the funds will be paid back and if the business cannor meet the other 10%, a payment scheme arranged with the Tax office will at worst cost half the persentage return you’ll earn on the crowd funding finance. We’ll be looking more into p2p funding after the crypto-currency topic.

The last time I searched the news, the major Australian banks were looking at adopting Blockchain security and the Commonwealth Bank was reviewing trading in Bitcoin. In Europe, several big banks are currently setting up for Bitcoin trading. It’s important to remember cybercurrencies effective shut the banks out, so the fact that banks are no longer refusing to acknowledge it, means it’s only a matter of time before it is accepted. Once a few major banks accept cybercurrency trading, it will open a floodgate of competition. Even if they try to invent their own altcurrency, it will still have to be compatible with Bitcoin, which is already well established.

Just a question that might be worth looking into; what would happen if you convert crypto-currency into a high value currency (e.g. Sterling or US dollars) then bring it back home to Australia or New Zealand when the exchange rates are favorable? The increase could offset some of the tax, if the transfer fees are not too high.

Beware of Banks offering assistance – there can be a hidden cost.

When is Hardship Assistance not “assistance”?

When you are with the Commonwealth Bank of Australia, the largest home loan lender in Australia, it seems.

Apparently the Commonwealth Bank of Australia has a different understanding of “assistance” to the dictionary and the rest of us. They seem to feel it is an excuse to slug their most desperate customers with extra late fees for payments made on time.

In these current times of financial turmoil, many people are experiencing financial hardship as companies cut back on staff. People are watching their superannuation funds evaporate and investments vanish before their very eyes. Banks are being encouraged to work with their home loan customers and restructure loan repayments to reduce the risk of defaults. No-one wants a repeat of the US Mortgage Prime market here in Australia.

However if your home loan is with the CBA, Australia’s largest home loan lender, assistance comes at a price and a very hefty one at that. Restructuring your repayments, even if they do not extend the term of your loan can land you with a $20.00 a month late fee, even if your repayments are not late!

Over a 20 year loan, those late fees will total an extra $4,800 alone and that’s not counting the compounding effect that can have, (which could add up to $10,560 assuming the interest rate stays below 7% for the remaining 20 years).

Ouch! That’s some very expensive “assistance”!

When challenged, the CBA did offer to reverse some fees but they made no correction for the compounding effect that the wrongful fees would have on the loan.

If you think that’s unscrupulous, it gets worse!

When we challenged the validity of these fees with the office of the Financial Services Ombudsman, the CBA offered to refund the rest but only if we signed an agreement to “not discuss this matter on any forum”.

Of course we didn’t sign but what does this really mean?

  • Are we correct in regarding these fees as unfair, possibly even unethical, the bank knows it and doesn’t want us to tell you?


  • Is the CBA willing to refund us, so long as we shut up, so they can continue to charge these unfair late fees to the thousands of other unfortunates?

Either way, something’s amiss when they offer hush money!

To quote their latest ads “Advantage CBA” . . . you’ve got to be joking!