ETFs and capital gains tax

Discussion in 'Exchange Traded Funds (ETFs)' started by galway_blow_in, 9 Jun 2017.

  1. galway_blow_in

    galway_blow_in Frequent Poster

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  2. fistophobia

    fistophobia Frequent Poster

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    Well spotted. Yes, it is US domiciled, non-UCITS, but priced in USD, also check out the distributions.
     
  3. SBarrett

    SBarrett Frequent Poster

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    Galway,

    Look for the ISIN number for the ETF you want to invest in. If it starts US, it's US based. If it starts IE, it's Irish etc


    Steven
    www.bluewaterfp.ie
     
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  4. galway_blow_in

    galway_blow_in Frequent Poster

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    Last edited: 7 Jul 2017
    thanks steven but the ISIN doesnt appear to be listed on most sites

    can you tell me if the followings european ( or eurozone ) etfs which are dollar denominated are U.S domiciled
    https://www.ishares.com/us/products/239644/ishares-msci-emu-etf

    https://www.ishares.com/us/products/264617/ishares-core-msci-europe-etf
     
    Last edited: 7 Jul 2017
  5. galway_blow_in

    galway_blow_in Frequent Poster

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    Last edited: 7 Jul 2017
    i think the american ones are all distributing rather than accumulating ? , i dont think it really matters that much that its priced in dollars , there may be euro denominated etfs which are u.s domiciled but i imagine liquidity is pretty thin
     
    Last edited: 7 Jul 2017
  6. galway_blow_in

    galway_blow_in Frequent Poster

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    Last edited: 8 Jul 2017
    just replacing my previous post as i see it was answered earlier
     
    Last edited: 8 Jul 2017
  7. galway_blow_in

    galway_blow_in Frequent Poster

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    hi again

    ok , ive finally settled on an etf which i believe gives very strong sector and geographical diversity , ive deliberately avoided the usa as i think its not cheap enough , anyway the etf is VEA

    can anyone confirm is this is u.s domiciled , i suspect it is but i cannot see the ISIN code no matter how hard i look

    thanks
     
  8. fistophobia

    fistophobia Frequent Poster

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    CUSIP number = 921943858
     
  9. galway_blow_in

    galway_blow_in Frequent Poster

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    So it's u.s domiciled ?
     
  10. Sarenco

    Sarenco Frequent Poster

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    Yes, VEA is US domiciled - its ISIN is US9219438580.
     
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  11. orka

    orka Frequent Poster

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    Various providers/info services have searchable ETF lists - for example, Internaxx (used to be TD International) http://www.internaxx.com/iframe/etf-selector - you can find the VEA ISIN from this. You can also search ETFs by sector, geographic area, provider, accumulating/distributing etc.
     
  12. whatsmoney

    whatsmoney Frequent Poster

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    For iShares ETFs you can check the domicile easily below
    https://www.blackrock.com/latamiberia/products/product-list#!type=ishares&tab=overview&view=list
    https://www.ishares.com/uk/individu...dual#!type=emeaIshares&tab=overview&view=list

    Here is the list of Vanguard ETFs, but domicile not listed
    https://investor.vanguard.com/etf/list?assetclass=stk#/etf/asset-class/month-end-returns

    However, as already mentioned, you can check in whatever Online share account you are using what the ISIN number is... in degiro
    it's listed under the ETF name, when you do a search for the ETF under the Quick Order button. US = USA, IE = Ireland etc
     
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  13. Mesmer

    Mesmer Registered User

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    I have a questions regarding the capital gains tax exemption. Please correct me if I'm wrong but the way I understand it is that tax payed on gains from ETFs domicile in Ireland or EU (only UCITS) is not treated as capital gains tax but subject to income tax. Does this mean the CGT exemption of €1270 does not apply?
     
  14. Sarenco

    Sarenco Frequent Poster

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    Irish/EU domiciled funds/ETFs are not subject to income tax or CGT - they are subject to a special exit tax regime. There is no annual exemption from this exit tax.
     
  15. Mesmer

    Mesmer Registered User

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    Thanks for your quick reply Sarenco. I've only started to look into this but it seems to me that taxes on ETF gains in Ireland are disproportionately high compared to the tax treatment of ordinary shares. I know for example in Germany ETFs are treated like any other shares and taxed the same way which, due to the simplicity of the product and their low TERs, has made investing in ETFs hugely popular over there. In Ireland it feels a bit like they want to discourage people from investing in ETFs. Anyway, that's for another thread.
     
  16. Sarenco

    Sarenco Frequent Poster

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    Well, US domiciled ETFs are treated like any other US shares for Irish tax purposes.

    It's actually not so clear cut that Irish/EU domiciled ETFs are less advantageous than non-Irish/EU domiciled ETFs - it very much depends on the assumptions made and an individual's marginal tax rate. The discussion on this thread from post #24 onwards goes into this point in some more detail -
    https://www.askaboutmoney.com/threads/is-it-mad-to-pay-off-a-cheap-tracker.193088/page-2

    There have also been rumours that exit tax will be reduced (in line with DIRT reductions) in the next budget.
     
  17. AJAM

    AJAM Registered User

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    You won't find a US Dom ETF that doesn't pay dividends, but a good alternative is buying some Berkshire Hathaway stock.
    Run by the famous Warren Buffet, the company owns 100's of other companies. As a result it is kind of like a mutual fund that owns lots of companies, hence you get the benefit of diversification by only holding 1 stock (just like an ETF). However Berkshire does not pay a dividend. They hold their cash and reinvest it.

    2 caveats. Berkshire is currently sitting on 100 Billion USD of cash. Some people are speculating that this will "force" them to pay a dividend. Personally I think they will continue to hold cash until they find attractive opportunities to deploy it. Secondly Warren is in his mid 80's now. Many people have speculated that Berkshire stock will drop when he passes away.
     
  18. MrEarl

    MrEarl Frequent Poster

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    Charlie Munger is 93 and seems to be still going strong.... perhaps Warren and Charlie will outlive us all ? :)

    You are correct about people being concerned about what might happen if and when one or both of these guys die. I have no idea what the succession planning is like at B.H. but I think most people feel that the B.H. party will be as good as over, once these two guys depart. That's a real shame, as the investments in their portfolio are probably suitable to hold indefinitely, so B.H. shares could start throwing off regular dividends (assuming you are happy to receive US$ dividends etc.).
     
  19. SBarrett

    SBarrett Frequent Poster

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    I mentioned in another post that I was at a seminar where a tax advisor said the gross up regime is more advantageous than paying CGT plus income tax on dividends every year, except where you have capital losses. Didn't get to see his assumptions though.

    While deemed distribution and the high exit tax is a pain, gross roll up is brilliant. Having dividends reinvested each year without any tax liability should not be underestimated.

    Steven
    www.bluewaterfp.ie
     
  20. PGF2016

    PGF2016 Frequent Poster

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    I read yesterday that they are holding the cash and waiting for a correction in the market so that they can available of lower prices. I'm sure it was speculation but it might not be too far wrong.