The challenge

Capital Gains Tax (“CGT”) in portfolio investments has traditionally been overlooked by many in the investment management industry, since it was typically insignificant, and any CGT that did arise was addressed by the fund administrators. Over a number of years, however, attitudes of both the taxpayer and tax authority have changed—a trend we expect to continue in line with the global trend towards greater regulation and fund transparency.

Governments in investment-class markets are increasingly imposing CGT on gains derived by non-resident investors. This can impact funds anywhere in the world, for example: a US or EMEA fund holding Indian, Pakistan and/or UK investments. The focus on net asset value (“NAV”) inaccuracies has also increased due to greater pressure from auditors, regulators, and investors to appropriately comply with all local tax requirements

The impact of non-resident CGT creates a number of challenges:

  1. 1. Difficulties in calculating NAV and ensuring CGT is appropriately accrued for, and to prevent any pricing errors
  2. 2. Tax agency and associated tax compliance, payment, and filing requirements
  3. 3. Preparing CGT numbers for statutory financial accounts while ensuring that correct accounting standards are being appropriately applied

To support your existing in-house capability, we have developed iPACS Global CGT as part of the iPACS Fund Tax Reporting suite of solutions. iPACS Global CGT is a disruptive tax technology, developed by Deloitte for asset managers and asset servicers, to help them manage portfolio-level CGT. It provides a single solution with a global, technology-led offering, providing efficiency while improving quality.

Benefits

Increase operational efficiencies

Leverage technology-based outsourcing to allow your team to focus on business critical agenda items

Realise more accurate pricing

Precision is delivered through detailed accrual calculations of daily CGT liabilities to ensure correct NAV

Gain business insight and governance

Stakeholders experience meaningful business insights previously held in manual spreadsheets, supported by a more robust governance framework

A more streamlined process

iPACS Global Capital Gains Tax reduces time spent on data transformation by drawing down fund data directly from your administrators

A single reference point for global CGT regimes

One platform houses all CGT rates, updated in real time with synergies experienced when combined with our global tax agency service

Features

Robotic data extraction from over 30 administrators

Daily, weekly, monthly or yearly calculations possible depending on local requirements

Automated data cleansing and enhancements where needed

Multiple asset class coverage

Scalable and iterable - can grow and adapt to your business needs

Senior expert sign off on your calculations by local Deloitte specialists

How it works

Cgt Overview Sep20