How is income from investment trusts taxed?

Investment funds pay taxes

The first thing we must take into account before knowing in which box the Investment Funds are put is to take into account that the Investment Funds are taxed in the savings base as capital gains and losses caused by a purchase and sale operation.

If you moved or jumped from one investment fund to another, you have nothing to write down. In that case there is no tax charge. But if you have sold, then the yield obtained in the transaction will be taxed as a capital gain or loss.

The capital gains or losses from the sale of Investment Funds are put in boxes 310 to 315 of the 2020 Income Tax Return, to be filled in 2021. Also included here are the operations with participations in listed public limited companies of investment in the real estate market (Socimi).

Remember that the capital yields are added to the rest of the savings income and losses and gains can be compensated until the specific savings income bracket is determined.    In the 2020 Income Tax Return, only income from deposits can be compensated with losses from homogeneous products, such as bonds, current accounts or dividends.

How are mutual fund gains taxed?

The capital gain (or loss) is taxed in the savings tax base, at a rate of between 19% and 23%, depending on the amount of the gain (or loss). Losses can be offset in the income tax return, unlimitedly, with other capital gains and, with a limit, with income from movable capital.

How are 2021 mutual funds taxed?

Taxation of investment funds in 2021 (tax return to be filed in May-June 2022) … Between 6,000.01 and 50,000 euros: 21% is payable Between 50,000 euros and 200,000 euros: 23% is payable More than 200,000 euros: 26% is payable.

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How are investment funds declared?

The capital gains or losses from the sale of Investment Funds are put in boxes 310 to 315 of the 2020 Income Tax Return, to be filled in 2021. Also included here are transactions with shares in listed companies for investment in the real estate market (Socimi).

Investment fund capital gain

One of the great tax advantages of mutual funds is that the transfer between funds is exempt from taxation. That is, if you move your investment from one fund to another, you do not have to pay taxes on the gains obtained to date (unrealized capital gain).

1. Income from movable capital (e.g. interest from current accounts, deposits, dividends, etc): they are integrated with each other in the savings taxable base and if the income obtained is negative, its amount will be offset against the positive balance of capital gains and losses declared in the other component of the savings taxable base with the limit of 25 percent of said positive balance.

2. Capital gains and losses that are included in the savings tax base (for example, sale of investment funds, shares, real estate, etc.): if the balance of the integration and compensation thereof is negative, the amount thereof may be offset against the positive balance of the other component of the savings tax base, income from movable capital, up to a limit of 25 percent of such positive balance.

When can I withdraw my money from a mutual fund?

You will be able to withdraw your money!

With most of the funds you can dispose of all your money at any time and without any penalty. You will only have to give the order to sell, total or partial, and in a few days you will have it at your disposal.

What taxes do FCIs pay?

Legal Entities: Results from redemptions and yields (interest) of FCI, are taxed in income tax at the general rate paid by corporations.

Who pays for mutual fund redemptions?

2. Investment fund fees: Redemption fee. This is defined as the commission charged by the fund manager individually to each participant at the time the investment in the fund is unwound, whether for total or partial redemption or transfer. It is calculated as a percentage of the capital reimbursed.

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Tax-exempt investment funds

In order to know how a mutual fund is taxed, we must know that one of its attractions is the absence of tax toll or exemption from paying taxes when a transfer is made. In other words, there will be no need to declare the profits or losses of a fund when the units are sold to invest the money in another fund as long as the savings have not been reimbursed in the current account. In other words, the deferral of a tax payment on the income obtained is the main tax advantage of this financial product compared to others.

In the event that the sale of the investment fund has meant a refund of the money, then you will have to include it in the savings taxable base of the income tax return. Either as capital gains or losses. This is because the refund is produced by selling a fund and not reinvesting it in another fund.

In this situation, its taxation is similar to that of the transfer of shares, except that the capital gain (difference between the purchase price of the units and the sale price of the same) is linked to a withholding tax of 19%. This implies that an amount of money is advanced to the Tax Agency, at the expense of the taxation to be made later, at the time when the corresponding tax return must be filed.

How are index funds declared?

The indexed funds are taxed in the IRPF within the savings income as part of the capital gains and losses, which also include shares, CFDs and most investments.

How are investment funds taxed?

Investment funds are exempt from taxation until they are reimbursed. When you decide to withdraw the invested money, the capital gain or loss obtained must be included in the savings taxable base in the IRPF.

How are investments in companies declared?

The shares are declared as an investment in line 34 of Form 110 prescribed by the Dian, which refers to investments and derivative financial instruments.

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Tax Treatment of Mutual Funds in Mexico

In this article we are going to explain the taxation of investment funds, the advantages they have for savers (such as tax deferral), tax withholdings and the taxation of fund transfers, among other issues.

Investment funds are collective investment institutions that are nourished by the contributions of people who want to take advantage of their savings. These products are created by entities, called fund managers, which invest the contributions of the participants in different financial assets, such as shares, bonds or other funds.

The evolution of these investments in the financial markets will produce results, known as yields. These returns can be positive and increase the fund’s assets or negative and decrease those assets.

The yield obtained -whether positive or negative- is considered a capital gain or loss. Therefore, it must be included in the taxable savings base in the personal income tax return (IRPF).