Changing tax agent mid-year: who calculates your personal income tax and how to consolidate the tax base

If you moved from one broker to another within a calendar year, your tax will be calculated separately: each broker is an independent tax agent and sees only the trades that went through its own account. A profit at the new broker will not be reduced by a loss at the old one, tax benefits will not carry over automatically, and the new broker will learn the purchase price of the transferred securities only from the documents you bring it. Consolidating everything into a single tax base is possible, but you will have to do it yourself, by filing a tax return at the end of the year.

Why the old and new brokers calculate tax separately

A broker's obligation to withhold personal income tax on transactions in securities and derivatives is set by Article 226.1 of the Russian Tax Code, and the rules for calculating the tax base by Article 214.1. The agent determines the financial result on the transactions that it executed and recorded itself. The law provides for no exchange of data between brokers: the old broker will not tell the new one about your expenses, the tax already withheld or how long you have held the securities. Withholding at the rate set for investment income is applied to a base calculated under the rules of 13%.

The practical upshot: if the first half of the year closed with a loss at the old broker and the second half with a profit at the new one, the new broker will withhold tax on its entire profit. The money is not lost, but you can only get it back on your own.

The main risk: a lost acquisition cost

So before the transfer, ask the old broker for the reports on the purchase trades and a statement of expenses for the securities being transferred, as well as a statement of income and tax amounts for the part of the year that has elapsed. Hand the documents to the new broker and get confirmation that the expenses have been accepted: it is easier to check this before the first sale than after tax has been withheld.

Withdrawing cash during the switch brings withholding forward

The agent withholds tax not only at the end of the year but also when cash is paid out of the account. If you close positions and withdraw the money to deposit it with the new broker, tax on the accumulated profit will be withheld immediately, and by the old agent. Transferring the securities themselves does not trigger this: there is no withholding because there is neither a disposal nor a payout. The choice between "sell and withdraw" and "transfer the securities" is also a choice about when the tax is paid and whether the holding period is preserved.

What the broker will not do for you

Netting results across different agents, offsetting losses from previous years (Article 220.1 of the Tax Code) and applying deductions for which the agent has no data are your job. The mechanics are simple: at the end of the year you obtain statements from each broker, add up the financial results within a single category of transactions (listed securities, unlisted securities and derivatives are netted under their own rules, not "everything against everything") and file a tax return. Any tax withheld in excess is refunded on the basis of that return. The filing deadline is 30 April of the year following the reporting year.

The long-term holding benefit and the holding period

Investment tax deductions are set out in Article 219.1 of the Tax Code. When securities are transferred between brokers, the holding period is not reset; what is reset is the new agent's knowledge of the acquisition date. Without documents it will not apply the benefit, even if you are formally entitled to it. The minimum holding period and the conditions for each instrument are set by law; check them against the current version, as this material does not give specific values. Separately, check the security's status on the organised market: the requirements on whether a security counts as traded are sensitive to a change of listing tier.

Where the broker was never the agent

On dividends from Russian shares, tax is withheld by the issuer or the depository, not by your broker, so changing broker has no effect on it and dividends are not included in the netting. Coupons on bonds, including OFZ, by contrast, pass through the broker as agent, and during a switch they will be split between the old and the new account according to the actual payment date. If the switch coincides with payouts, check them in advance against the dividend calendar.

Individual investment accounts: transfer, don't close

For an individual investment account (IIA), closing the old agreement and opening a new one means losing the account's age, and with it the conditions tied to that age. Only transferring the agreement to the new broker preserves it. The law allows the two agreements to coexist briefly during the transfer and sets a limited period for completing the procedure; its length is not given here, so check the current version of the law and the broker's rules. For agreements opened from 2024 onwards, the deduction rules differ from the previous ones, and expectations from the old account cannot be carried over to the new one.

Step by step

Step 1: before the transfer, obtain from the old broker the reports, the statement of expenses and the statement of income and tax amounts. Step 2: decide what you are transferring, securities or cash, bearing in mind when tax is withheld. Step 3: hand the documents to the new broker and get confirmation that the expenses and acquisition dates have been accepted. Step 4: at the end of the year, consolidate the results of both agents in your tax return. Step 5: check whether anyone withheld tax on unconfirmed expenses; that tax is refundable.

Separately, assess counterparty risk when choosing the new broker, and keep your own record of trades in shares: in the transition year it is the only source that sees both halves of your history. Definitions of the terms used are collected in the glossary.