Module III·Article IV·~1 min read
Capital Gains in an International Context
Taxes on Investment and Capital
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Capital Gains Tax: Comparative Analysis
Capital Gains — profit from the sale of a capital asset (stocks, real estate, business).
Russia: PIT 13%/15% with no distinction between "short-term" and "long-term" gains. Benefits: LDV (3 years), IIS.
USA: Short-term capital gains (< 1 year) = ordinary income rate (up to 37%). Long-term capital gains (> 1 year): 0%, 15%, or 20% (depends on income). Additional 3.8% tax (NIIT) for high-income.
United Kingdom: Capital Gains Tax: 10% (base rate taxpayers) or 20% (for most assets); 18%/28% for residential real estate. Annual deduction £3,000 (reduced as of 2024).
UAE: 0% — no capital gains tax for individuals or companies (except the oil & gas sector and banks). This makes the UAE attractive for large asset transactions.
Singapore: 0% — no capital gains tax. Exception: if asset sale is part of trading business, income is classified as operational.
Optimization Through Residency
Transferring tax residency to a jurisdiction with zero or low CGT before selling a large asset is a common strategy. Risks: Exit Tax (tax upon exit from residency) in several countries; "183 days" — residency rule.
Exit Tax in Russia: Russia currently does not have a full exit tax for individuals when changing residency, but the Federal Tax Service actively monitors "tax emigrants".
Practical Assignment
An entrepreneur plans to sell a stake in a Russian business for 500 million rubles in 2 years. Considering: (1) sale as a Russian resident, (2) relocation to UAE (obtaining Emirates ID, 183+ days) before sale. For each scenario, calculate the tax and identify the key risks.
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