UK ETF Tax treatment for non domiciled individuals

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klaus-v

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Hello,

I'm new in the forum and really found a lot of useful information in the last day or two that I have been browsing.....

As a non Irish domiciled individual (Netherlands), I have a U.S. offshore broker account which I opened before moving to Ireland (I moved ~ 10 years ago) and invest in various U.S shares and ETFs. I’m always careful to only invest in U.S. shares and U.S. domiciled ETFs and steer clear of any other financial products or ETFs domiciled in Ireland / EU/EEA etc. so that I can avail of the remittance basis of taxation) and avoid all the taxation overheads that Irish domiciled individuals have to face. I’m looking now to rebalance the portfolio and came across one or two UK domiciled ETFs which I believe would tick the box for my financial goals and would like to invest a percentage of the sum with them. I wonder though, how are the UK domiciled ETFs treated in Ireland now that the UK is out of the EU ? The bottom line is that I would like to know if I can now add any UK domiciled ETFs and still avail of the remittance basis of taxation, or if they are still treated in the same way as any of the EU/EEA based ETFs, in which case I will avoid buying them as they don’t qualify for the remittance basis. I wonder if anyone knows ?

Thanks
Klaus
 
My feeling is that the UK based ETFs are still within the E.U. based rules and I say this for two reasons. The first is that most tax legislation was exteneded to bring the U.K. to within the E.U. and it now states "E.U. Member State or the United Kingdom". The second is how ETFs are structured in the U.K. and that is as a UCIT. This is one of the triggers for the on-shore off-shore funds regime (that even sound farcical). Take a look at the Revenue tax and duty manual on the topic and see what is says. The Revenue wouldn't necessarily want lots of U.K. ETFs to be treated like shares so I'd say the change has happened.

Please note this is a top of the head response and I haven't looked at the legislation so I'm very prepared to be corrected.
 
Thanks everyone for the comments. I checked the prospect and it's indeed a UCIT ETF. So I will definitely avoid it.
Dublin67, thanks for the reminder to check the Revenue and tax obligations on the ETF topic, I did so but there is a message saying that the PDF is currently unavailable since it's being updated.......I'll try later on in a few weeks to see if it is republished and what are the changes.

  • Part 27-01A-03
    Exchange Traded Funds (ETFs)
    This manual is currently unavailable as it is being updated.

Klaus
 
It has been saying that for some months now - so a few weeks may be over-optimistic
 
Here is the last one. I assume that this is the one that is being updated.
 

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