Is this fund subject to CGT or Deemed disposal?

M

Mez!

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I’m considering investing in the JP Morgan Germany Equity Fund below. However, I’m wondering if it is subject to CGT or deemed disposal from a taxation point of view?

ISIN: LU0143832128

[broken link removed]
 
Hi Mez

That's a Luxembourg-domiciled UCITS fund so it's subject to the exit tax/deemed disposal tax regime.
 
Pity. I thought it might be subject to CGT as I couldn’t find any reference to UCITS.

Out of interest, are there any investment funds which would be subject to CGT that invest in the Eurozone?
 
Totally agree with Mr Gekko - I don't go near any "good" funds as they are called. 41% exit tax (this may have decreased), no losses allowable and a deemed disposal. Totally penal taxation regime that has no place in a general system of taxation.

My unitised investments are also in UK Investment trusts. I'm not typically one to let the tax tail wag the dog but in this case it does.
 
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I agree regarding the potential of U.K. investment trusts and their more favorable taxation status in Ireland. However, are you not concerned about currency risk wiping out any potential gains?

In addition, the annual reported growth figures of IT’s includes dividend yield, which in Ireland could be taxed up to 51%. For investors purely interested in capital appreciation, their (generally) higher fees (compared with ETF’s) and the prevailing exchange rate could have a detrimental effect on compounding returns (assuming the intention is to reinvest dividends).

Would an EU domiciled Eurozone accumulating ETF or a even a no-dividend stock like Berkshire Hathaway (currency risk also) not make more sense? I appreciate that the dividend is taxed eventually, but the maths suggest it’s more favorable for capital appreciation to allow them to accumulate.
 
The currency risk is overstated.

Using a very simple example, imagine a sterling denominated investment trust that invests in Japanese equites (Ballie Gifford Japan plc perhaps?). If sterling collapses by 50%, the share price should double to compensate. The Euro investor is made whole.

It’s really only UK domestic exposure that you should worry about in the context of sterling risk.
 
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