Archive for Capital Gains

Compliance 2014 – Capital Gains Tax – Ireland

If you’ve already made or about to make a disposal of a capital asset (e.g. certain shares, an investment property, a business, etc.) anytime between 1st January and 30th November 2014 you will be obliged to pay your Capital Gains Tax by 15th December 2014.

If you decide to wait and dispose of your asset between 1st December and 31st December 2014 then your payment will be due by 31st January 2015.

What happens if you miss these deadlines?

Interest of 0.0219% per day will be applied to all late payments of Capital Gains Tax.

What happens if you make a gain in the first part of the year and a loss in the second part?

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Written by | Posted in Capital Gains • Europe, Middle East • Tax Policy

Capital Gains Exemption – What You Need to Know

Tax Saving of Claiming Capital Gains Exemption

A Canadian business owner who carries on an active business through a corporation may be eligible for an $800,000 lifetime capital gains exemption (indexed for inflation after 2014) on the sale of his/her corporation shares or on the deemed disposition of his/her corporation shares immediately before his/her passing. For a Canadian business owner in the top marginal tax bracket, the claim of the $800,000 lifetime capital gains exemption will result in a tax saving ranging from $156,000 to $200,000, depending on the province in which the business owner is a resident.

How to Qualify for the Capital Gains Exemption

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Written by | Posted in Canada • Capital Gains • Estate Planning Tax • Income Tax • Individual • Small Business

German Church Tax Causes Controversy

There is currently a controversy in Germany in regard to the application of capital gains to the “church” tax that is levied on individuals who profess membership in certain churches in Germany.

The Bill of Rights was added to the United States Constitution in order to provide greater constitutional protection to certain individual liberties. These liberties include freedom of religion, a free press, the right to peaceful assembly, the right to bear arms, protection against unreasonable search and seizure, the right to avoid self-incrimination (taking the fifth), due process, protection against double jeopardy, the right to a jury trial, the right to counsel, and protection against cruel and unusual punishment. We have seen how some of these rights have been eroded over the years through changing attitudes, judicial Read More

Written by | Posted in Capital Gains • Europe, Middle East • Income Tax • Tax Controversy

Bitcoins Are Not “Currency” – Australian Tax Office

The Australian Taxation Office (ATO) has just issued a guidance paper stating: “The ATO’s view is that Bitcoin is neither money nor a foreign currency, and the supply of bitcoin is not a financial supply for goods and services tax (GST) purposes.”

Furthermore, the ATO says: “Bitcoin is, however, an asset for capital gains tax (CGT) purposes.”

For businesses that use Bitcoins (or any other crypto-currencies) to buy and sell trading stock, the transactions will be treated for tax purposes as a bartering arrangement. Buying trading stock with Bitcoins will require businesses to charge the 10% GST on the coins. Selling trading stock for Bitcoins will mean the business can claim an input tax credit for Read More

Written by | Posted in Australia/Oceania • Capital Gains • Income Tax • Indirect Tax • Individual • International • Tax Policy • VAT

Canada-US Cross-Border Tax Issues When Winding-Up a Subsidiary

Canadian corporations form US Subsidiaries, and US Corporations form Canadian Subsidiaries, all the time.

What are the cross-border tax implications when those subsidiaries are wound-up? This article will provide an overview of those implications.

Winding-up a US Subsidiary (“USco”) of a Canadian Corporation (“Canco”)

For US tax purposes, proceeds received on the wind-up of USco are generally not treated as a dividend, and hence no U.S. withholding tax should apply.

Rather, such amounts would generally represent proceeds from the shares which should Read More

Written by | Posted in Capital Gains • Corporate • International • North America • Real Estate

How Canada Taxes Real Estate Gains of Non-Residents

Like many countries. Canada taxes non-residents who realize gains on real estate located within its borders(1).

This will be true whether the real estate is capital property that is held for the purposes of earning from rental or a business; capital property held for personal use; or inventory of a business (e.g. where it is held for resale).

This article will focus on situations where the real estate is capital property.

The Income Tax Act (“the Act”) provides that non-residents are subject to tax in Canada on taxable gains from the “disposition” (which can include sales, as well as other events deemed to be dispositions, such as death) of “taxable Canadian property” (“TCP”)(2). TCP Read More

Written by | Posted in Capital Gains • International • Real Estate

Special Rules In The Canada-US Tax Treaty Apply To Cross-Border Death Tax Issues

Canada and the United States have very different regimes for imposing taxes on death. The United States imposes a Federal Estate Tax; however, Canada has not imposed any Estate Tax since 1971. Rather, Canada taxes accrued, but unrealized, capital gains on death, as part of its income tax system.

Most tax practitioners are not aware of the fact that there special rules found in Article XXIX-B of the Canada-United Tax Convention (“the Treaty”) that are aimed at providing relief in connection with certain cross-border death taxes issues.

Some of these are summarized below:

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Written by | Posted in Capital Gains • Estate Planning Tax • Individual • International • Tax Provision/Tax Reporting

Canadian Tax Issues With Foreign Inheritances

Many immigrants to Canada will ultimately inherit substantial wealth from family members who did not follow them here.

Usually, those new Canadians are not aware of the Canadian income tax implications of those future inheritances and the fact that careful planning in that regard can often reap rewards, in terms of savings in future Canadian taxes, that far exceed any related costs.

Firstly, the good news: inheritances, whether from non-resident relatives or from Canadians are never taxable income.

However, the income and capital gains earned from such inherited assets (whether in their original form, or reinvested in other assets) will be subject to tax in Canada. Read More

Written by | Posted in Capital Gains • Income Tax • International

Vodafone Return of Value To Shareholders – Irish Tax Treatment

On 2nd September 2013, Vodafone Group Plc. announced that it was disposing of its 45% interest in Verizon Wireless to Verizon Communications Inc.

At the same time, it also announced its intention to carry out a “Return of Value” to its shareholders, of which there are almost 400,000 in Ireland. Many of these shareholders had acquired Vodafone shares in exchange for their Eircom shares in 2001. The “Return of Value” would be partly in cash and partly in Verizon consideration shares.

On 14th May 2014 the Irish Revenue Authorities issued a comprehensive Tax Brief outlining the tax treatment of the Vodafone Return of Value to its shareholders which provides comprehensive guidance on the calculation of the base cost for Capital Read More

Written by | Posted in Capital Gains • Europe, Middle East

Senate Finance Committee Blank Slate Project 2013 – Senator Rockefeller’s Suggestions

Evaluation of Senator Suggestions for the Blank Slate Project

As noted in my 9/9/13 post, I’m going to summarize and analyze proposals senators offered to the Senate Finance Committee, and that the senator made public. Despite falling behind on my project, as tax reform likely heats up in 2014, I’m back at it as I’d like to look at and share what might be a broader array of proposals and issues. In no particular order, the second set of suggestions I’m commenting on are from Senator Rockefeller (D-WV) (7/26/13 letter). Senator Rockefeller is a member of the Senate Finance Committee.

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Written by | Posted in Capital Gains • Federal • Gift Tax • Income Tax • OECD

Income Tax Aspects of Non-Business Capital Gains and Losses – Part V

Government Debt Securities

Interest on non-taxable bonds

The interest on most of these is not taxable but must be reported on the tax return. On form 1040 and 1040A, it is reported on line 8b (non taxable interest). On form 1040 EZ, on line 2, put “TEI” and then the amount, but do not include it in the amount reported for taxable interest on line 2. Exceptions (i.e., interest is taxable) are federally guaranteed obligations (there are some exceptions to these), revenue bonds used to finance home mortgages (there are some exceptions to these), and private activity bonds (there are some exceptions to Read More

Written by | Posted in Capital Gains • Income Tax
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