Quora Answer: If I Have $10 Million in a Bank, Do I have to Pay Taxes on That Money?

The following is my answer to a Quora question: “If I have $10 million in a bank account, do I have to pay taxes on that money, every year, just for it sitting in my account?”

The $10 million itself is not taxable, because that would penalise people for putting funds in the bank, and that does not benefit the economy.  However, in most places, the income gained from that $10 million is taxable.  People avoid this by parking the ownership of the funds under an offshore company, or a trust.  In countries such as Singapore, we have no capital gains tax.  That income is not taxable.  That being said, simply putting such an amount in an account is a wasted opportunity, and opens you to currency risk.  It would make more sense by putting those funds into some sort of financial instrument commensurate with your risk profile, and investment horizon.