When do Chilean mutual fund gains become taxable?

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jehturner
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When do Chilean mutual fund gains become taxable?

Post by jehturner » Mon Dec 26, 2016 1:36 pm

Can anyone confirm whether gains on fondos mutuos become reportable (to Chile) for tax in the year they are sold? Or is one just supposed to report their change in value every year?

My Chilean income has always been below the filing threshold (& my foreign income exempt), but now that we rent our house out, I'm wondering whether I should sell a fund that I've been sat on for several years, to realize ~1M peso gains before the end of this year (if still possible), otherwise I might have to fill in those intimidating forms when I do need to sell it at some point :shock:. I hope that's a general enough question to have a well-known answer.

Thanks a lot!

James.

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fraggle092
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Re: When do Chilean mutual fund gains become taxable?

Post by fraggle092 » Mon Dec 26, 2016 2:45 pm

First bit is easy. From the taxman:
Los valores por fondos mutuos no rescatados no deben declararse.

They are liable for tax in the tax year they are sold. There may be tax benefits, depending under which regimen they were issued, according to this.

Thats all an amateur can say.
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jehturner
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Re: When do Chilean mutual fund gains become taxable?

Post by jehturner » Mon Dec 26, 2016 3:13 pm

Thanks, Fraggle! That's helpful. I did look on the SII page but hadn't spotted that info. I think I might try selling one of the two funds, since I can't see any obvious down side and there isn't time to get advice.

Yes, of course, I wasn't expecting more than that.

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fraggle092
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Re: When do Chilean mutual fund gains become taxable?

Post by fraggle092 » Mon Dec 26, 2016 4:31 pm

Glad to be constructive for a change!
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papageno
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Re: When do Chilean mutual fund gains become taxable?

Post by papageno » Mon Mar 20, 2017 10:29 pm

fraggle092 wrote:First bit is easy. From the taxman:
Los valores por fondos mutuos no rescatados no deben declararse.

They are liable for tax in the tax year they are sold. There may be tax benefits, depending under which regimen they were issued, according to this.

Thats all an amateur can say.
I haven't seen much on the Forum about "PFIC" (Passive Foreign Investment Company) reporting. I'm looking into working with a US RIA that says, among other things, to avoid non-US mutual funds, hedge funds, etc., ANY pooled investment like the plague, as "...the tax treatment of PFICs is extremely punitive compared to the tax treatment of similar investments that are incorporated in the US...". Further, that reporting on the mandated Form 8621 can consume many hours, and that it's now mandatory by both the taxpayer AND the FFI. So, nowhere to hide.

Any thoughts/experiences out there?

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admin
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Re: When do Chilean mutual fund gains become taxable?

Post by admin » Tue Mar 21, 2017 8:19 am

if your an american, you will be punished for all foreign investment. Even if you don't owe any tax. Just doing the paperwork is sufficient punishment.

I honestly would be more inclined to check a box, and mail a check to the U.S. IRS even if I did not owe any tax, than spend the hours to wade through all the "gotcha" tax traps they have set for American's overseas.
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From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

papageno
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Re: When do Chilean mutual fund gains become taxable?

Post by papageno » Tue Mar 21, 2017 9:50 am

Well, at least I'm discovering this stuff in time to avoid making the mistakes (these, anyway). :evil:
Back to the drawing board. ..

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Re: When do Chilean mutual fund gains become taxable?

Post by admin » Tue Mar 21, 2017 2:14 pm

yea, sometimes they stack the chips in ways that insure you will make a mistake.
https://www.forbes.com/sites/robertwood ... b1a6463c37

I would call it entrapment, but entrapment implies there is some way you would not be trapped.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

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