Employees, especially in senior roles, may have accumulated significant wealth and have asset holding structures or personal investment companies in place. Given the increased scrutiny, it is critical these individuals review their structures and better understand the tax implications arising from their actions.
Does the tax treatment of transactions within an investment portfolio, such as interest, dividends and capital gains, differ between jurisdictions? According to any double taxation agreements - in which jurisdiction is an item subject to tax? Does the tax treatment of an investment vehicle differ and render previous planning obsolete?
TAX TREATMENT OF PERSONAL INCOME
Where an individual who is a key decision maker in a corporation resides, may also affect the corporations’ country of residence and source of income. This may have significant tax implications for the corporation. We look at this in more depth in Working from anywhere: Employer Corporate Tax
TAX TREATMENT OF CORPORATE INCOME
For those that are contributing to pension plans. How does a change in tax residence impact their ability to contribute, the relief available for doing so, and the tax treatment on withdrawals/income from the pension?
Estate planning, having a will in place and considering the Inheritance tax position of an Estate. How does a change in jurisdiction affect prior planning? Is there any new exposure in the new location?
ADDITIONAL TAXES AND REPORTING
In certain jurisdictions a tax resident may be subject to additional taxation in the form of Wealth Taxes. Further in reporting terms, Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) declarations are based on the account holder’s tax residency. COVID-related travel restrictions alone may have impacted individuals’ relocation strategies and affected their tax residency.