Capital gains tax (CGT) in portfolio investments has traditionally been overlooked by many in the investment management industry, since it was typically not significant and any CGT that did arise was dealt with by the fund administrators. However, over a number of years, attitudes of both the taxpayer and tax authority have changed—a trend we expect to continue in line with the global trend toward greater regulation and fund transparency.

Governments in investment-class markets are increasingly imposing CGT on gains derived by nonresident investors. This can affect funds anywhere in the world (for example, a US or EMEA fund holding Indian, Pakistan, and/or UK investments). The focus on NAV inaccuracies has also increased, since there is much greater pressure from auditors, regulators and investors to appropriately comply with all local tax requirements

The impact of nonresident CGT creates a number of challenges:

• Difficulties in calculating NAV and ensuring CGT is appropriately accrued for, and to prevent any pricing errors from arising
• Tax agency and associated tax compliance, payment, and filing requirements
• 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 Global iPACS Fund Reporting suite of solutions. Key to this solution, iPACS CGT is a disruptive tax technology, developed by Deloitte for asset managers and asset servicers, to help them manage portfolio-level capital gains tax. It provides a single solution with a global, technology-led offering that heightens efficiency while improving quality.