Salary FYI

Capital Gains Tax

Tax

A tax levied on the profit realized from the sale of a non-inventory asset — such as stocks, real estate, or business interests — that has increased in value.

## Capital Gains Tax

Capital gains tax applies to the profit from selling an asset for more than its purchase price (cost basis). The rate often depends on how long the asset was held.

### US Rates (2025)

| Holding Period | Rate |
|---------------|------|
| Short-term (< 1 year) | Ordinary income rates (10–37%) |
| Long-term (≥ 1 year) | 0%, 15%, or 20% + 3.8% NIIT |

### Global Comparison

| Country | Long-Term CGT Rate |
|---------|---------|
| US | 0–23.8% |
| UK | 18–24% (residential), 10–20% (other) |
| Germany | 25% + Soli (flat Abgeltungssteuer) |
| Japan | 20.315% |
| Singapore | 0% |
| UAE | 0% |

### Relevance to Salary

Capital gains tax is relevant for employees with equity compensation. When RSUs vest and are later sold at a higher price, the appreciation is subject to capital gains tax. ISO holders may face both AMT on exercise and capital gains on sale.