By holding investments like bonds in these accounts, any income earned will not be taxed in the period earned -- it will only be taxed, albeit at ordinary income rates, when money is actually withdrawn from the account.
Further, some taxpayers closely control how their premiums are invested and may direct premium funds toward illiquid assets they currently own in an attempt to convert taxable income to tax-exempt income that is eventually passed on to their beneficiaries
Uncertainty at a political level, and the possibility of further changes in the tax code, create urgency.
Starting in July, foreigners who live at least 60 days a year in Uruguay and buy real estate valued above 3.5 million inflation-linked UI -- currently equivalent to $378,000 -- will qualify for tax residency.
Generally, pursuant to the QOF rules, investors who wish to defer capital gains have 180 days from the applicable recognition date to invest such capital gains into a QOF.2
"This has been a resounding success that has far exceeded our plans," said Sergio Ermotti, the bank's CEO, addressing asset management inflows.