Thanks everyone for all the feedback, difficult to digest it all, so thanks for keeping comments as clear and on topic as possible. I hope my replies are furthering the conversation.
@Marc
Thanks for the info, great to get a professional's opinion. I am aware of the dividend witholding tax, just didn't want to focus on it. But I was not aware of the US estate tax on certain funds. Have you an example of these funds? I mentioned I wanted to access passive world equity index/ETF funds such as those by Vanguard, are some of these subject to this?
Is your tax guide and SBP articles publicly available?
@North Star
Yes, it is the deemed disposal that is my major issue as it is a 15+ year plan.
Thanks, was not aware some UK Investment Trusts can be used to fall outside of deemed disposal.
I couldnt find the info easily on some accumulating funds, but I assume over a 15-20 year horizon, there is no way dividends could make up 50% of the gain?
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I am seeing lots of mention of bespoke plans if I do NOT choose the Life Insurance option, but I am unclear if this is just because:
a) it is par for the course where professional advisors are more used for bespoke "active" investment plans
b) or, it is actually the most efficient way to set it up from a tax and management costs perspective
From what I am reading, my two options right now are:
1. Irish life insurance provider, high yield equities fund or similar, subject to Exit tax and deemed disposal
2. Irish financial advisor, non-EU passive fund such as VTWAX or similar index fund, subject to CGT/income tax and no deemed disposal
Both approaches are going to be setup in a trust, will be planned for a 15+ year horizon, and will require financial/legal/tax advice.
From all the comments above,
- it is sounding like the professional fees of option 2 might actually be as high as option one. Is this correct even if I want a passive product? Can I expect to pay once-off to set it up a trust/passive investment product, or will I be expecting annual commissions from advisors even if it is passively invested for the long term?
- am I correct that comparing both options in terms of tax effects, the deemed disposal on option 1 should outweigh most other tax effects in a 15+ year investment?
Thanks to all again for the input, it is very helpful.