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Where to begin to protect stock portfolio?

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toby9999

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Dec 19, 2020
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#1
Hi

I'm completely new here and there's a lot of try to understand.

What is the general approach to minimise the capital gains tax on my stock portfolio?

If I understand correctly from reading the posts here, the most important concept is to establish tax residency in a country with a low tax rate, in a "tax haven".

I am generally free to travel and live anywhere, and my only income is from my stock portfolio. What would be some good starting countries to look at? I know that's probably dependent on my situation, but really I'm quite open to anything that is legal and safe to live there (or doesn't require my physical presence etc). Ideally the solution if possible, won't require millions of dollars to setup either ;)

Appreciate any starting advice to send me in the right direction.

Thanks :)
 
#3
Not dividends, just sell a few shares from time to time to pay for living expenses. Just normal ownership of shares. They are US shares but owned and traded via an Australian trading company (basically everything done in Australia for tax purposes at this stage, but the shares are from the NYSE).
 
#4
Lots of options then. UAE could be one of the simplest.
Some alternatives:
Switzerland, Belgium, New Zealand, Singapore, Malaysia, Hong Kong, Belize, Cayman Islands, ...

I believe Thailand, Malta or Cyprus should also work.
Any preference for what kind of country you'd like to live in?
 
#5
If you don't get any dividends than UAE is the best in terms of taxation, however UAE is pretty expensive to live in if you compare it to Malaysia or Thailand or even Cyprus and Malta.

If you do get dividends you preferably want to look for a country that has a tax treaty with the US in order to lower the withholding tax on dividends.

You've got a lot of options in terms of low tax countries, how ever the more important questions is probably where do you want to live besides the taxation part?

Portugal NHR might also be a nice option..
 
#6
No dividends from my shares.

Fairly open to living anywhere (Europe is a preference though). Wanting to live somewhere safe from crime or potential government unrest, ideally not a "rich" country in terms of living expenses.
 
#7
toby9999 said:
No dividends from my shares.

Fairly open to living anywhere (Europe is a preference though). Wanting to live somewhere safe from crime or potential government unrest, ideally not a "rich" country in terms of living expenses.
Click to expand...
Since your shares are NYSE traded the best option within EU-Europe might be Cyprus. If you can switch to EU/EEA listed shares (or your NYSE shares are also traded on an EU/EEA exchange) then Bulgaria is your best option.
If you like it a bit more exotic (and much cheaper) you should look into Georgia (country).
 
#8
I see there are a couple of forums dedicated here to Cyprus - does that mean it's a really good option for most people? I also read a report from PWC that said there was no tax payable on shares ... surely that can't be right can it?
 
#9
toby9999 said:
I see there are a couple of forums dedicated here to Cyprus - does that mean it's a really good option for most people? I also read a report from PWC that said there was no tax payable on shares ... surely that can't be right can it?
Click to expand...
Why not?! PWC is correct in so far as you have to be a private individual + non-dom.
However, do take note that you still have to pay GESY/GHS which can be costly depending on your overall capital gains. Another disadvantage is that even though you are required to contribute to GESY/GHS you will not be able to benefit from the system for the first 5 years of your presence in Cyprus in case you are not employed.
 
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#12
Bagpacker said:
Since your shares are NYSE traded the best option within EU-Europe might be Cyprus. If you can switch to EU/EEA listed shares (or your NYSE shares are also traded on an EU/EEA exchange) then Bulgaria is your best option.
If you like it a bit more exotic (and much cheaper) you should look into Georgia (country).
Click to expand...
Trade is a prohibitted activity from getting small business/micro business status in Georgia wich are taxed at 1%. You can find all the prohibitted activities in Resolution of the Government of Georgia №415.
 
#13
It certainly seems like Cyprus might be a good option for me ... there isn't any capital gains tax on profits derived from the sale of shares ... I was expecting to maybe pay 15% tax, so 0% is a very nice surprise indeed. Residency seems quite cheap and easy too, and it gives me access to the EU and many other countries visa-free. Also, the cost of property is much cheaper than Australia and the year-round weather is nice. There appears to be no issues with government/political unrest, nor any anti-foreigner attitudes.

I wonder if there are any negatives I'm missing about Cyprus?

In terms of where to keep my money and where to trade my stock portfolio, I was thinking of getting a Swiss Bank account with attached brokerage account ... would that be a good idea to keep my money safe? Would it be difficult to establish such a Bank account?
 
#16
toby9999 said:
It certainly seems like Cyprus might be a good option for me ... there isn't any capital gains tax on profits derived from the sale of shares ... I was expecting to maybe pay 15% tax, so 0% is a very nice surprise indeed. Residency seems quite cheap and easy too, and it gives me access to the EU and many other countries visa-free. Also, the cost of property is much cheaper than Australia and the year-round weather is nice. There appears to be no issues with government/political unrest, nor any anti-foreigner attitudes.

I wonder if there are any negatives I'm missing about Cyprus?

In terms of where to keep my money and where to trade my stock portfolio, I was thinking of getting a Swiss Bank account with attached brokerage account ... would that be a good idea to keep my money safe? Would it be difficult to establish such a Bank account?
Click to expand...
Hi,

Cyprus indeed is an excellent option.

CGT only applies on sale of property or sale of shares connected to property so 0% CGT in your case.

Income tax - profit from trading in listed securities is exempted.

Great weather all year, you can purchase property for as low as EURO 300K and get a permanent residency card. Also, if you have money you want to invest, properties in Cyprus can get you an average 4.5-5.5% ROI, in some cases even higher, as long as you know where to go.

Would be happy to discuss more.
 
#18
Cyprustr said:
Trade is a prohibitted activity from getting small business/micro business status in Georgia wich are taxed at 1%. You can find all the prohibitted activities in Resolution of the Government of Georgia №415.
Click to expand...
@Cyprustr Why do you come up with a GE small business/micro business while the OP just mentions a portfolio of stocks :rolleyes:?
Please read the OP and all related posts:
The OP describes a long term stock investor who holds positions in non-Georgian securities in a non-Georgian custody account. Every here and then (= infrequent!) a few shares are intended to be sold to generate cash for living expenses. Considering the seller to be a private individual + tax resident of Georgia such action does not constitute Georgian sourced income.
Furthermore, even potential capital gains of Georgian securities would be tax free after keeping those securities for more than two years (Art. 82, subparagraph (f.c) of the Tax Code of Georgia).
 
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#19
toby9999 said:
I am generally free to travel and live anywhere, and my only income is from my stock portfolio.
Click to expand...

I'm in the same situation. I have boiled down the list of countries to Cyprus and Monaco. The main advantage of Monaco is that you actually don't have to file a tax return at all. Gains on stocks, derivatives, currencies, commodities etc. are completely tax free. Disadvantages are that there is no double tax treaty with the US and rents are quite high. If you can live in a small apartment it's not that bad though (2-3k/month). Withholding tax can be minimized to a certain extent by using options.
Non Dom status in Cyprus is limited to a 17 years, you have to pay a fee of 2.65% on your income up to 180k/year for the healthcare system. Currency and commodity profits are taxable and you have to file tax returns. Main advantage are the much cheaper rents and property prices.

The Bahamas would be another good option, too many Hurricanes and too far away from Europe for me.
 
#20
mediumrare said:
I'm in the same situation. I have boiled down the list of countries to Cyprus and Monaco. The main advantage of Monaco is that you actually don't have to file a tax return at all. Gains on stocks, derivatives, currencies, commodities etc. are completely tax free. Disadvantages are that there is no double tax treaty with the US and rents are quite high. If you can live in a small apartment it's not that bad though (2-3k/month). Withholding tax can be minimized to a certain extent by using options.
Non Dom status in Cyprus is limited to a 17 years, you have to pay a fee of 2.65% on your income up to 180k/year for the healthcare system. Currency and commodity profits are taxable and you have to file tax returns. Main advantage are the much cheaper rents and property prices.

The Bahamas would be another good option, too many Hurricanes and too far away from Europe for me.
Click to expand...

Non-dom is only for dividends and interests. That's not a problem for him because he's not talking about dividends. The profit from selling shares is exempt for both, non-dom and normal residents.
 
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