Capital Gains Tax (CGT) is one of the most common pitfalls for entrepreneurs with assets in multiple jurisdictions.
Without careful planning, you can end up paying far more than you need to.
We are going to look at how to optimise your finances to keep your CGT bill under control.
What is CGT in a global context?
CGT applies to the profit you make when you dispose of non-inventory assets such as shares, business interests or property that have increased in value.
Each country sets its own rates, reliefs and thresholds, so a gain taxed at 10 per cent in one jurisdiction might face 30 per cent in another.
Understanding the disparate rates of CGT across territories where you hold assets is vital for managing your overall CGT bill.
How can you manage your CGT liabilities?
The first step to managing CGT is to use tax treaties to your advantage.
Double‑taxation treaties exist to prevent the same gain being taxed twice so these can be applied to remove the burden of redundant liabilities.
Timing can also have a substantial impact on your CGT liability as some jurisdictions offer lower rates for long-term holdings.
You need to ensure that you plan your disposal to coincide with the most favourable tax periods.
Being aware of what assets may be CGT-exempt can further help reduce your bill.
This can be paired with selling assets eligible for relief such as qualifying business property or approved investment schemes.
By doing this, you can secure full or partial exemptions from CGT.
Combining and coordinating these strategies can help keep your CGT bill from damaging your overall financial health.
Which locations deliver the greatest CGT relief?
Several jurisdictions have built their appeal on light, or non‑existent, CGT regimes.
Hong Kong levies no CGT and combines this with a competitive corporate rate, making it a favoured location for holding structures.
Singapore likewise offers zero CGT alongside entrepreneur-focused incentives.
The United Arab Emirates is known for its generous approach to personal wealth as it imposes neither CGT nor personal income tax.
However, tax savings should never obscure the practical considerations required for doing business overseas.
Before relocating or restructuring, it is important to get a holistic picture of your current tax bill and ensure that the financial infrastructure of the foreign country is best suited to your overall requirements.
Managing CGT as an international entrepreneur requires a strategic approach informed by a thorough understanding of global tax laws.
A balanced view guarantees that CGT benefits don’t come at the expense of your wider business strategy.
Our expert team is on hand to help you understand the best strategies for keeping your CGT bill low as you conduct business internationally.
Don’t let Capital Gains Tax erode your international assets. Speak to our team today!
