ETF profit taking advice sought

pingin2

Registered User
Messages
11
I'm retirement age and retired .I bought a range of ETF s to the value of about 40,000 euro on Degiro a few months ago . As it stands I'm in profit to the tune of about 1,400 euro. My initial plan was to let them untouched for about 5 years .I don't need the money presently .
The question is is there any case to be made for taking the profit now and starting the whole process again next week and repeating that frequently ( that is if they're in profit of course ). I'm not really very well versed in the whole investment area and would appreciate any advice .
Thanks
 

jpd

Registered User
Messages
2,501
If you do that, you pay tax at 41% on all the gains now instead of in 8 years time
 

pingin2

Registered User
Messages
11
Thanks for the replies .
Fintan the short term gain for no reason other than the thrill of the kill and making far more in a few months than if I had the money invested in some Irish bank .
Thanks for the link Sarenco
Jpd do I not also pay the 41% tax in 8 years time ?
Thanks again
 

jpd

Registered User
Messages
2,501
Yes, if you keep the ETF for 8 years, then you will pay the tax in 8 years or rather 9 years time

If you prefer to pay it now, then do so but I can't think why anyone would pay taxes early if they do not have to
 

AJAM

Registered User
Messages
70
.I bought a range of ETF s
The other big disadvantage for ETF's (apart from the 8 year, 41% Exit Tax) is that you can't offset losses against gains.
For that reason, if you are investing in ETF's, in my opinion, it is not a good idea to invest in more than 1.

In a "normal" country you could buy a range of ETF's, tilting towards whatever, factor, theme or geography you like. Then if one of them losses money you can offset the losses against the gains in the others. But not so in Ireland.

So you're better off, picking one broadly diversified one (e.g. world index) and sticking with it.
 

FintanJ

Registered User
Messages
27
Is each etf purchase taxed separately?

example.
If you purchase etf X in January and then again in March for different prices.
In July, you sell all of etf X making a profit on January purchase but loss on March purchase. Can you offset profit and loss and just pay tax on net?
 

jpd

Registered User
Messages
2,501
Each is a separate investment, so no you can not offset losses afaik. They would also have different deemed disposal dates

A complete mess
 

FintanJ

Registered User
Messages
27
thanks jpd. That was my understanding also.

So “picking one” only “works” if you have one off large investment.
 

jpd

Registered User
Messages
2,501
You could just purchase them once or twice a year to minimise the accounting hassle
 

pingin2

Registered User
Messages
11
Thanks for all the helpful discussion . All I really want to do is to have my savings earning some return and not causing me too much hassle . Can anyone suggest an easier ,less complicated, safeish product to invest in the short term with less accounting hassle .
Thanks again
 

AJAM

Registered User
Messages
70
Investment Trusts are treated like shares for tax purposes, but are in fact closed end funds.
They tend to have slightly higher fees than ETF's but lower taxes.
FCIT
SMT
BNKR
JGGI

Are 4 medal rated Investment trusts. You can research them on morningstar.co.uk
 

jpd

Registered User
Messages
2,501
Prize bonds

The Investment Trusts are not "safeish, short term" investments
 

fistophobia

Registered User
Messages
179
Theres a solution...
Sinn Fein will be in government.
Invest in UCITS funds, plan your exit from Ireland, sell after 8 years.
No exit tax.
Thats what I am doing.
 

jpd

Registered User
Messages
2,501
They are invested in shares - these are not "safeish" in my understanding of the word "safeish" ie free from risks nor for short term investments - most advisors will say that you need a minimum of a 5 year horizon to invest in shares and I do not think that short term and 5 years are the same
 
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