The Offshore Taxable investment type allows you to model an investment using user-defined tax rates for income and capital gains.
This account type can be useful when modeling investments held in another jurisdiction or investments where you need to specify the applicable tax treatment.
Adding an Offshore Taxable Investment
To add an Offshore Taxable Investment, go to:
Dashboard > + button > Savings and Investments > Investments > Type > Offshore Taxable
Enter the details of the investment, including its current value and growth assumptions.
Within the account, you can specify tax rates for:
- Capital Gains
Income
These rates determine how Voyant calculates tax on the investment rather than relying on a predefined tax treatment.
How is income taxed?
The Income Tax Rate applies to income generated by the investment.
The amount of taxable income generated is determined by the Interest Yield or Dividend Yield entered within the investment's growth assumptions.
For example, suppose an Offshore Taxable Investment has:
- A value of 100,000
- An Income Tax Rate of 15%
- A Dividend Yield of 10%
The investment would generate 10,000 of dividend income.
The resulting tax would be:
10,000 × 15% = 1,500
The tax is deducted from the investment and can be viewed within Year View.
Reinvest Yield
The Reinvest Yield setting determines whether income generated by the investment is retained within the account or made available as cash flow.
If Reinvest Yield is set to Yes, the income generated by the investment is reinvested back into the account after applicable taxes.
If Reinvest Yield is set to No, the income is not reinvested and is instead available to help meet expenses or other cash flow needs within the plan.
The income remains subject to the specified Income Tax Rate regardless of whether the yield is reinvested.
How are capital gains taxed?
The Capital Gains Tax Rate applies to gains realized when funds are withdrawn from the investment.
Voyant uses the tax rate entered by the user to calculate the applicable tax on the gain associated with the withdrawal. Important: If you need taxes applied to the withdrawal use this field.
Viewing taxes in the plan
Taxes associated with an Offshore Taxable Investment can be viewed within Year View > Expenses
.
You can also review the tax calculation within Year View > Taxes where they will be labeled as "offshore taxes".
To view them on the taxes chart turn on the details button and you will see them listed as "offshore taxes".