Changing residency questions

[GrumpyMess]

Let's imagine the situation, a person lives in a country A, has some accounts in countries B, C and moves to the country D.
Then he de-registers from the country A and registers in the country D, telling the banks in the countries B,C that he is now resident of the country D. The main question is how will react the tax office in the country D for the previous obtained assets? Has the person to declare all the assets? Next year the tax office from the country D will receive the info through AEOI. Will they start to require the tax documents on that accounts or any other assets or a simple statement that these assets were acquired before getting residency in a country D is enough? Will they contact the tax office from the county A?

 

[Martin Everson]

Nb. Without knowing countries involved one can't fully answer the questions however....

The main question is how will react the tax office in the country D for the previous obtained assets?

You would need to look at country D's tax code and also when in the tax year you move. In general the previous obtained assets would be considered capital to country D. Country D may have wealth tax, capital gains tax etc etc that may need to be applied to these assets so knowledge of them by country D maybe needed. Country A may still need to know of assets even after you leave i.e for Spanish residents and capital gains tracking.

Has the person to declare all the assets?

Depends on country D tax code and your tax status in country D i.e will you be a resident non-domicile in country D etc etc. Does their tax code require declaring assets held offshore.

Will they start to require the tax documents on that accounts or any other assets or a simple statement that these assets were acquired before getting residency in a country D is enough?

They generally don't actively investigate how assets where acquired. Country D in general would only be concerned if they are taxable to them. I would 100% keep records of how the assets were acquired however. Places like UK do investigate and can hit you with an unexplained wealth order (UWO) but only for those suspected of involvement in serious crime or that have political exposure and were assets are more than £50,000. Other countries may have similar.

Will they contact the tax office from the county A?

More like country A would contact Country D via i.e CRS if applicable. Why would you care if country D contact country A tax office?

In general I would not worry I have moved multiple times and never had any major issues with money earned before I moved to new country.

 

[GrumpyMess]

In general the previous obtained assets would be considered capital to country D. Country D may have wealth tax, capital gains tax etc etc that may need to be applied to these assets so knowledge of them by country D maybe needed. Country A may still need to know of assets even after you leave i.e for Spanish residents and capital gains tracking.

Following this logic the most calm way is to cash out all the assets so there will be no capital gains. Probably if the country has the wealth tax it altogether has an obligation to declare all the assets.

Depends on country D tax code and your tax status in country D i.e will you be a resident non-domicile in country D etc etc. Does their tax code require declaring assets held offshore.

As I understand if the status is resident non-domicile the tax office is unlikely to make any investigations. But a majority of countries doesn't have non dom statuses, so it can be a basic residence.

More like country A would contact Country D via i.e CRS if applicable. Why would you care if country D contact country A tax office?

There are a lot of reasons not to give the country A a reason to concern.

In general I would not worry I have moved multiple times and never had any major issues with money earned before I moved to new country.

In the modern world there always is a reason to worry

 

[Martin Everson]

There are a lot of reasons not to give the country A a reason to concern.

Like?

In the modern world there always is a reason to worry

What are you so worried about can you share or is it private?

 

[GrumpyMess]

Like?


What are you so worried about can you share or is it private?

Nobody likes being under an investigation, especially in an unsafe corrupted country notably if some mistakes in the past are made