Selling all after 7.5 is intriguing, if not s little risky! Any price move between sell and buy back could be a disaster!
I thought about option A as well but didn't like the reduction in buying frequency
e.g. UCITS ETFs sound great until you realise the have to be reported to revenue every eight years, so if you invest once a month then you'll have have a taxable event every single month from year eight onwards, which is surely a pain. Not to mention if you invest in more than one.
If you have an ETF that has made a loss are you also then deemed to have disposed it at a loss even if you never sold it , so for example buying at a cost of 20 for a unit , at 8 years it's worth 10 a unit . You do nothing and keep hold of it , at 16years you start paying tax on the gain from the 10'price not thr original 20
Guys apologies if I am misunderstanding, but I would have thought selling an EU UCITS ETF after 7.5 years would mean exactly the same tax liability and administrative work as a "deemed" sale at 8 years.
At 7.5 years you sell, tally up gains and then file and pay in the eighth year.
At 8 years you do not physically sell but for revenue purposes you make a deemed sale, tally up gains in the eighth year and file and pay in the ninth year. Of course any payment you make can be offset against any future deemed sale (at 16 years, 24 years etc....)or actual sale.
Well what I was really getting at with the 7.5 years full sale of the ETF, was that you avoid the yearly tax returns after year 8 / 9 because year's 4, 5, 6 etc investments are all sold at that first year 8.
i.e. I don't see a huge amount of complexity in tallying up every 2015 investment in 2023 and then paying in 2024, but I do see it becoming a much bigger burden in 2024, 2025, 2026 etc as you repeat the process each year for investments in 2016, 2017, 2018 etc. And especially because even though from your perspective it's all part of the same fund, from reporting perspective you need to be able to report on the gains on each unit purchased each investment.
Currently however I'm thinking that figuring out the best way to deal with that challenge is a decision for another 6 or 7 years' time before the first 8 year rule kicks in, and in the meantime I'll just make sure to record granular information at each investment point now so hopefully the bulk of the information for the calculations is captured ahead of D-year!
Regardless of the deemed disposal difficulties, more importantly for long term strategies I wish Revenue would allow you to setup and declare your own "umbrella" structure within your portfolio of funds. I don't see why as a private investor you don't have access to that facility like any life company fund manager.
But if you sell at 7.5 years and rebuy the same portfolio a few weeks later I see it as less beneficial
Let's say you made a profit and paid tax after 7.5years , you rebuy everything at same price and it then drops in value - at 16 years you can claim back that loss against 8 years deemed disposal over payment but only if you didn't sell at 7.5 years , but selling at 7.5 years loses you this privilege . I hope you get what I'm saying . So in an scenario of profit at 7.5 years but somehow that pricr then dropped between the next 8 years you would be better off to just do deemed disposal and hold on to same etf
But if you sell at 7.5 years and rebuy the same portfolio a few weeks later I see it as less beneficial
Let's say you made a profit and paid tax after 7.5years , you rebuy everything at same price and it then drops in value - at 16 years you can claim back that loss against 8 years deemed disposal over payment but only if you didn't sell at 7.5 years , but selling at 7.5 years loses you this privilege . I hope you get what I'm saying . So in an scenario of profit at 7.5 years but somehow that pricr then dropped between the next 8 years you would be better off to just do deemed disposal and hold on to same etf
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