When reverse convertibles become a reporting nightmare.
And why most systems aren’t built to handle them.
Capital market instruments are getting more complex. Reverse convertibles, spin-offs, fund mergers, structured notes – they’re part of everyday portfolios for private banking clients.
But when tax season comes around, these very instruments often cause the biggest issues:
No acquisition price documented
Incorrect taxation of final payout
Misclassified income (capital gain vs. interest)
Missing documentation for reclaim procedures
For one client, a single reverse convertible led to a €3,800 correction by the tax advisor. The bank’s report had classified the payout as regular income – but it was actually a redemption with embedded capital gain.
💡 The fix?
You need tax systems that:
✔ Understand the mechanics of complex capital events
✔ Track underlying holdings & derivatives
✔ Apply country-specific tax treatment (e.g. Germany vs. Switzerland)
✔ Deliver clear, structured explanations for every figure
At AlphaTax, we’ve built exactly that.
Our reporting engine handles:
→ Reverse convertibles and other structured products
→ Reclassifications and corporate actions
→ Cross-jurisdictional logic across 10+ countries
→ Complete audit trails for every transaction
Because in tax reporting, the small details aren’t just technicalities – they’re the difference between trust and confusion.
Has your system ever struggled with structured products? Let’s talk.
