For advisers who provide advice outside Argentina to clients who are habitually resident in Argentina and only applies to Old Mutual International capital redemption business that is completed outside of Argentina.
General information regarding Argentine residents
Argentine taxpayers are subject to tax on their worldwide income. Thus, income subject to taxation includes all remuneration earned by the Argentine taxpayer, locally or abroad.
Tax relief on premiums
There is no tax relief on premium payments. Single premium payments must be referred to Old Mutual International Risk and Regulation.
Tax on total encashment
The total encashment of the account would be subject to income tax at progressive rates ranging from 9% - 35% and personal assets tax (see subtopic wealth tax).
Tax on partial encashment
The partial encashment of the account would be subject to income tax at progressive rates ranging from 9% - 35% and personal assets tax (see subtopic wealth tax).
Tax on death
As our account is a redemption account (no lives assured), this is not applicable.
Tax on maturity
The maturity of the account will be subject to income tax at progressive rates ranging from 9% - 35% and personal assets tax (see subtopic wealth tax).
Transactions within the account
There is generally no tax on fund switching provided the switch does not imply that benefits are received by the accountholder as a deemed payment.
The Argentine Revenue Service must be able to evidence the following in order for a deemed payment to occur:
- the income has accrued by the mere passage of time;
- the income has matured;
- the accountholder has the right to collect the income and can legally enforce such right;
- the failure to receive the income is a direct consequence of the accountholders own choice.
It is our understanding therefore, that there is unlikely to be a tax occurring on a fund switch.
Argentine domiciled individuals are subject to a 0.5% personal assets tax if the value of their computable assets is less than or equal to Argentine Peso (ARS) 750,000 per year and they have been living in Argentina for five years. Employees with computable assets valued at more than ARS750,000 but less than ARS2,000,000 will be subject to a 0.75% personal assets tax. For employees with computable assets values at more than ARS2,000,000 but less than ARS5,000,000 the rate will be 1% and this increases to 1.25% for those with computable assets over ARS5,000,000. The personal assets tax is not a withholding tax; it is a tax paid annually based on the assets held in Argentina and abroad. Argentine domiciled taxpayers may deduct from the tax base a non-taxable amount equal to ARS305,000.
Pledge of the account
There is no tax on pledge of the account.
Assignment of the account
There is no tax on assignment of the account provided the assignment does not imply that benefits are received as a deemed payment.
Payment to Argentine resident beneficiaries
Where the owner of the account is an offshore trust and distributions are made to an Argentine resident beneficiary, the payments would be subject to income tax and personal assets tax.
Law of the contract
The account(s) issued by Old Mutual International will be governed by Manx Law.
Investment risk and responsibilities
There are no investment guarantees associated with our funds and in particular there is no guarantee of the return of capital. We offer a range of funds with varying risk characteristics.
The value of the account is determined by the value of the units of the funds to which the account is linked. We accept no responsibility for the investment performance of the funds. The value of units of the funds will depend on the performance of the assets of the funds. The value of the units can fall as well as rise. It should be noted that units and bank deposits, could, in exceptional circumstances, become valueless (this could either be temporarily because of suspension, or permanently). In addition, should any assets be denominated in a foreign currency, there will be exchange rate risks.
Depending on the assets of the funds, there may be limits on the liquidity of the assets. In the event that there are problems liquidating any assets of the funds, the company may defer any transactions involving allocation, cancellation or fund switch until such time as we consider appropriate.
By requesting investment into particular fund or funds the client accepts these investment risks.
It is for you and your client to decide which funds are most appropriate to their needs. We do not give advice.