F&C, I think has fared poorly in comparison to an All World Index over the past while.A broadly diversified investment trust, something like F&C Investment Trust plc, might fit the bill for the portion of your savings that you are confident that you will not need to liquidate for 10+ years.
That vehicle is subject to income tax on dividends and CGT on realised gains.
Do you suggest an investment trust because they have significant capital losses?Agree with Sarenco's recommendation of an investment trust.
With respect, do you understand what well diversified means? Of course SMT has performed well - Tesla makes up over 10% of their holdings!F&C, I think has fared poorly in comparison to an All World Index over the past while.
There are some better more aggressive investment trusts, like Scottish Mortgage for example which look good but I don't think F&C has good returns.
Yes.Do you suggest an investment trust because they have significant capital losses?
Not necessarily.If they had no losses would you still recommend an investment trust
Monks is a more diversified investment trust then that is doing very well also.With respect, do you understand what well diversified means? Of course SMT has performed well - Tesla makes up over 10% of their holdings!
Their top 10 holdings make up over 50%. It's not diversified.
Except the tax treatment isn't much help in the circumstances is it?you may as well just go with an ETF and buy a world index
How is that increased with an unhedged investment trust?foreign exchange currency considerations
Monks is not more diversified than FCIT.Monks is a more diversified investment trust then that is doing very well also.
If your time horizon is only 5 years until you want to make gifts to the children then equities probably not the way to go even with the substantial CGT loses. You could end up just adding to the losses. You need to separate out your individual objectives. After all gifts offer a guaranteed return of 33% CAT saving whereas in order to benefit from the CGT losses you NEED an investment to appreciate. The U.K. stock market in the OPEC era for example went nowhere for 13 years.
Certainly sell the investment property and the small share portfolio and consolidate your position. But avoid well intentioned recommendations to pile into extremely concentrated investments which have performed very well recently due to large positions in one or two stocks.
Work out how much the gifts will deplete the liquid savings and keep that amount in state savings and invest the balance in equities.
You are correct almost any retail investment product in Ireland is unsuitable as you are subject to exit tax rather than capital gains tax.
we can provide a portfolio of 12,500 shares via non-eu ETFs which will allow you to reap the benefits of the capital gains tax losses with low costs
You know what you will get with an ETF. An investment fund might outperform or it might not then you have fees on top aswell. The fees are also murkier with Investment Trusts. Is there not a currency risk investing in the pound?Except the tax treatment isn't much help in the circumstances is it?
How is that increased with an unhedged investment trust?
A broadly diversified investment trust, something like F&C Investment Trust plc, might fit the bill for the portion of your savings that you are confident that you will not need to liquidate for 10+ years.
That vehicle is subject to income tax on dividends and CGT on realised gains.
Only to the extent that underlying assets are GBP, and even then a lot of those companies are international and therefore not really GBP exposure.Is there not a currency risk investing in the pound?
No, risk of US Estate taxes too great for US ETFs we use Canadian ETFs to achieve the same effects. Much cheaper than U.K. investment trusts.Thanks a lot for your detailed response.
Yes the time horizon for the equities will be 10 years. We will keep the 195k in the post office/prize bonds for kids deposits.
We intend to sell the investment property in the next year or two as it is located abroad but will pose difficulties during COVID.
In relation to the non-EU ETF’s, how does this work? Are these US domiciled investments and what costs are involved?
You have €565k in cash and €100k in equity in the apartment.
First of all, you and your wife, should gift each of your children €3k each every year as there is no Capital Acquisitions Tax on such gifts.
Secondly, would any of your children be interested in living in the investment apartment? If so, it might be worth keeping.
Agree with Sarenco's recommendation of an investment trust.
But don't agree that you must only use cash which you don't need for ten years.
The entry and exit costs are low. So they should not impact the return significantly.
Let's say you invest the full €565k in it now and you need €200k in three years.
Over every investment horizon, you have a positive expectation of a return. That means that most years, the expected return outweighs the expected loss. Sure you might lose. The longer you hold, it the less likely you are to lose. But that does not mean that it's not suitable over a three year horizon, or as in your case, an uncertain horizon.
Discuss the purchase of homes with your children. Tell them that the €6k you are giving them each year is to go into a property deposit bank account and is not to be touched. When they are ready to buy, tell them that there is more where that came from. This should give them an incentive to save.
Brendan
Yes, you would have to go through a stockbroker.How would I go about investing in this? Would this have to be through a stockbroking firm?
Yes, I think that’s highly likely.Are investment trusts likely to remain liable to CGT instead of exit tax in Ireland for the forseeable future do you think?
Why don’t you tell us the full costs of your proposed solution (including your own fees) so the OP can judge for himself?Much cheaper than U.K. investment trusts.
How does one know which investment trusts are the best?Why don’t you tell us the full costs of your proposed solution (including your own fees) so the OP can judge for himself?
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