FSS: "Check Settlement Date for RIA Tax Benefits...50% Deduction Starting August"

Investors are advised to exercise caution, as the capital gains deduction rate for the domestic stock repatriation account (RIA), which offers tax benefits for overseas stock transfers, is applied based on the settlement date, not the sale date. Additionally, various extra fees may be incurred with the Integrated Investment Account (IMA) in addition to the management fee.

On July 26, the Financial Supervisory Service issued consumer guidance regarding financial investment products, including RIA and IMA, covering these points.

The RIA account is a product that offers a capital gains deduction benefit to those who sell overseas stocks acquired by December 23 of the previous year and reinvest the proceeds in domestic stocks for one year. If the sale settlement is completed by the end of July 2026, 80% of the capital gains will be deducted. For settlements from August to the end of December 2026, the deduction rate is 50%. The deadline for the 100% capital gains deduction benefit ended at the end of May 2026.

The Financial Supervisory Service especially emphasized to consumers that the date for tax benefit eligibility is not the trade execution date, but the settlement completion date. For example, Mr. A, after reading that selling overseas stocks through an RIA account by May 31, 2026, would allow him to receive a full (100%) capital gains deduction, sold his overseas stocks on May 29, 2026. However, because the settlement was completed on June 2, 2026, the applicable deduction rate was reduced to 80%.

To qualify for the tax benefit, the proceeds from the sale of overseas stocks must be invested in domestic listed stocks or equity funds through the RIA account for more than one year. Eligible investment assets within the RIA account are restricted to domestic listed stocks, domestic equity funds, and deposits. If an investor makes net purchases of overseas stocks through an account other than an RIA, the tax benefit may be reduced proportionally.

The cumulative number of RIA accounts increased nearly fourfold in three months, rising from 83,035 at the end of March 2026 to 313,594 at the end of June 2026. Over the same period, the total balance rose from 414 billion won to 2.656 trillion won.

The financial authorities also explained that, in the case of IMA products, early termination may be restricted and that additional fees such as sales and performance fees may be charged on top of the management fee. When investing in exchange-traded funds (ETFs) via a bank's money trust, the cost may be higher compared to direct ETF trading. The trust fee ranges from 0.03% to 2.0%, and early termination fees range from 0% to 1.0%.

This content was produced with the assistance of AI translation services.