Is there a way to beat or around Capital Gain Tax ?

[mickthepropertyguru]

This is a scourge for the investor. Not only risking your hard earned cash abroad then you got to give a slice of it to the Tax man in the form of CGT in the country you reside in.
Any way around this ???

 

[The Soup Dragon]

Here are some of the ways I know of.

In the UK you can place some investments in SIPPs or other pensions.

Depending on where you live and amount being invested, it may be worthwhile setting up a company so that CGT is reduced.

Some investments are in the shape of loans with additional payouts. The payouts can come in a number of forms. Sometimes as interest on loan (tax is due, but can be lower than CGT.) An investment I have with a fund listed on the Channel Islands Stock Exchange will pay out as individual projects in the fund are completed. That spreads the period over which the Capital Gains are realised and will hopefully reduce CGT I pay.

 

[mickthepropertyguru]

Thanks Soup Dragon. I am going to look into this.
I will go to a Tax specialist soon and ill report back when i find out more

 

[overseas wills]

Re

Apart from not telling the tax man there is very little you can do. When it comes to sell I think people have to take this into consideration and make their selling price reflect the hit.

 

[andyk2]

Is this too obvious

Don't invest in a country that charges CGT

AK

 

[LegWork]

Well since I don't believe this has been posted yet

Could just use an Offshore Corporation somewhere without CGT or property tax. Only mention this because those in the states reading this need to remember that citizens are responsible for their world income not just their income in the states. An OC circumvents this issue at least until one tries to bring the money back into states.

 

[melanie123456]

You just have to pay it !

 

[eagleray12]

minimse or eliminate CGT

You just have to pay it !

New Zealand has no cgt or stamp duty a good start if you want to buy build or develop in a country that has cgt use a foreign corporation that has no reporting requirements to the local government except for physical cash or rental received in that country . then when you want to sell the asset sell the company or corporation , the benifical ownership has not changed so you not only save transfer duties,gst or vat and capital gains tax and the new purchaser has the benefit at both ends of the deal as well

 

[DC]

Yes, sell at lose then pay no Capital Gains tax.

 

[mickthepropertyguru]

Thanks for all the great replies, does anybody else have any views on how to elude CGT or soften the blow

 

[mickthepropertyguru]

I have been informed that investors that buy shares in a company that has bought land etc, are not subject to CGT in the country of investment, due to the fact that the company is an Irish or UK company. Therefore investors are only subject to CGT in their own country.
ie: The company is set up solely to purchase the land through.
Is this a definite way to beat paying CGT twice, in countries that don't have Dual Taxation Agreements. Any thoughts ?

 

[The Soup Dragon]

Mick. Depending on where the company is operating, how the tax systems work and how the company is owned (there can be several shell companies) it may be possible for the company to avoid / minimise CGT on sale of assets.

So your returns could be affected by CGT twice. The first instance being before the funds are distributed to you (described above.) The second being on your receipt of gains (unless you have managed to place your stake in a SIPP or other tax efficient vehicle.)

Many of these companies / funds / syndicates are set up in a tax efficient manner. The OPDF funds that I introduce for are set up so there is very little tax payable on gains. (Little / no CGT payable by the companies. Your stake in the fund is via shares which can be placed in a SIPP.)

 

[FJCOM]

Thanks for all the great replies, does anybody else have any views on how to elude CGT or soften the blow

There are a few country-specific options.
A strategy that works anywhere and everywhere, I don't know.