Search found 4917 matches
- Mon Mar 18, 2024 5:47 pm
- Forum: Non-US Investing
- Topic: Choosing Irish equity ETFs
- Replies: 9
- Views: 885
Re: Choosing Irish equity ETFs
Am I missing something here? Could these be due to higher tax on dividends withheld by ex-US companies to Ireland rather than to the US? Possibly. I don't think you're missing anything, just that there are a lot of moving parts to this comparison. For example, VWRD's OCF (TER) erodes the dividend yield, since that's what it comes out of. And VWRD has a high-ish OCF, 0.22%(*), compared to VTI's 0.03% and VXUS's 0.08%. Then there's the matter of the timing/period over which these yield numbers have been calculated. And there may well be some difference in the tax withholding on ex-US stocks when they pay dividends to Ireland compared to the US. That would all depend on the specifics of a (large number of) tax treaties. To really understand t...
- Mon Mar 18, 2024 10:42 am
- Forum: Non-US Investing
- Topic: Choosing Irish equity ETFs
- Replies: 9
- Views: 885
Re: Choosing Irish equity ETFs
The dividend WHT rate between US and Cyprus is 15%, same as with Ireland. So regarding US stocks, holding a US fund or an Ireland fund is effectively the same. It's ... complicated . I don't know how local country tax works in Cyprus, but in the UK (which has the same 15% US dividend tax treaty rate as Cyprus), a US domiciled fund can sometimes be a little better. The reason is that the UK allows a full tax credit for direct US tax paid on a US domiciled ETF, but not for the indirect tax paid by an Ireland domiciled ETF. So where the UK tax rate is above 0%, for Ireland domiciled ETFs, UK investors get to pay tax to the UK on the 85% of dividends that remain, but for US domiciled ETFs they can claim a credit of up to 15% that reduces or ev...
- Mon Mar 18, 2024 7:05 am
- Forum: Non-US Investing
- Topic: Portfolio for move to UK
- Replies: 23
- Views: 3912
Re: Portfolio for move to UK
I don't see any (if that makes you feel any better!).alwaysonit wrote: ↑Mon Mar 18, 2024 6:54 am I assume there are no obvious flaws with this plan given the lack of discussion.
Re your plan to sell and repurchase equivalent ETFs on April 5, I assume that your move "next month" to the UK will be after this date, not before it. That is, you want to reset your cost basis for UK CGT before becoming a UK resident. Afterwards is too late.
- Mon Mar 18, 2024 6:58 am
- Forum: Non-US Investing
- Topic: Choosing Irish equity ETFs
- Replies: 9
- Views: 885
Re: Choosing Irish equity ETFs
Generally, just the simplest, the most convenient, and/or the cheapest for you. Each traded listing is just another view of the exact same underlying fund, so the results will be identical no matter which exchange or which listing of the fund you use.OneTrickPony wrote: ↑Mon Mar 18, 2024 6:45 am On which exchanges is it preferable to buy UCITS ETFs, if they trade on multiple venues simultaneously?
LSE, Xetra, Amsterdam?
Presumably you will want to trade in EUR rather than in USD or GBP, so some listings will be of more interest to you than others (you have no reason to convert your EUR into (say) USD when not needed).
Yes. Neither of these apply.OneTrickPony wrote: ↑Mon Mar 18, 2024 6:45 am Also is it correct that Irish and/or British stamp duties do not apply to transactions involving ETFs?
- Sun Mar 17, 2024 9:03 am
- Forum: Non-US Investing
- Topic: Three fund portfolio and index funds, non-US
- Replies: 5
- Views: 554
Re: Three fund portfolio and index funds, non-US
Not at all. These wiki articles (and others) outline one, two, three, and four-fund portfolios and widely used non-US domiciled index ETFs that residents of any non-US country can use:
- Simple non-US portfolios - Bogleheads
- Building a non-US Boglehead portfolio - Bogleheads
- Sun Mar 17, 2024 5:19 am
- Forum: Non-US Investing
- Topic: Federal Tax Residency, Resident Alien left the US Mid-Year (W-9/W-8BEN)
- Replies: 1
- Views: 393
Re: Federal Tax Residency, Resident Alien left the US Mid-Year (W-9/W-8BEN)
Am I considered a resident alien in the US for 2024 or do I need to file as dual status for 2024 ? Is this a choice one makes or is there a rule that determines which one to choose exactly? The IRS is very keen on providing examples of first year tax residency, but notably poor on final year guidance. What little they provide is this (which I imagine you have already found, quoted here only for the benefit of casual readers!): Residency Ending Date Under the Substantial Presence Test In general, if you meet the substantial presence test, your residency ending date is your last day of presence in the United States followed by a period during which: You are not present in the United States, You have a closer connection to a foreign country t...
- Sat Mar 16, 2024 6:02 pm
- Forum: Non-US Investing
- Topic: Choosing Irish equity ETFs
- Replies: 9
- Views: 885
Re: Choosing Irish equity ETFs
Welcome to the forum.
- EU investing - Bogleheads
- Simple non-US portfolios - Bogleheads
We have some wiki articles that offer suggestions for ETFs and portfolios for non-US investors. For example:
- EU investing - Bogleheads
- Simple non-US portfolios - Bogleheads
- Sat Mar 16, 2024 4:56 pm
- Forum: Non-US Investing
- Topic: Moving US → UK as a US NRA, UK citizen.
- Replies: 2
- Views: 505
Re: Moving US → UK as a US NRA, UK citizen.
Accessibility issues with these ETFs?pelican2 wrote: ↑Fri Mar 15, 2024 12:51 pm Open a brokerage account with IBKR. ... I see two options for what funds she should buy when setting up the IBKR account:
- Option 1: Only buy funds that are HMRC reporting, US-domiciled, and not PFICs (i.e. these). That way the portfolio can be ACATS-transferred to a US broker if she moves back to the US, and she doesn’t have to liquidate and rebuy.
Anecdotal reports suggest that Interactive Brokers is following PRIIPs regulations, under which UK residents cannot (currently, under review) buy US domiciled ETFs.
- Sat Mar 16, 2024 1:42 pm
- Forum: Non-US Investing
- Topic: SIPP tax relief advice
- Replies: 5
- Views: 696
Re: SIPP tax relief advice
To answer your core question, there is nothing stopping you from putting money (which must be from your earnings) into a pension in one year (living off your savings in the meantime) and drawing it the next. That is, there is no minimum holding period for a pension contribution. (There are some squirrelly technical rules around both contributing to and drawing from pensions at the same time, but it sounds like you don't plan to do this .) The "squirrelly technical rules" are a real trap. Can be. For example, the borderline unintelligible grey area that is the ' pension recycling ' rules. I believe the limit on contributions if you are drawing a pension is £4k pa - but I may be out of date on that. You are. The MPAA is £10k as of ...
- Sat Mar 16, 2024 3:38 am
- Forum: Non-US Investing
- Topic: SIPP tax relief advice
- Replies: 5
- Views: 696
Re: SIPP tax relief advice
Just realised my doh!!!! moment. I would obviously need to pay income tax on withdrawals above my personal allowance. But that doesn't mean there is absolutely no tax advantage to you. You may save higher rate (or even additional rate) tax on contributions, but end up paying only basic rate tax on withdrawals. Or even if in the same tax bracket, provided your pension is below £1,073,100, 25% of what you withdraw is tax-free. This equates to 15% basic rate tax, or 30% higher rate, potentially both lower than what you would have paid had you taken the contributions as tax. On top of this, if your employer offers 'salary sacrifice' into pensions, you avoid paying employ ee NI on contributions, and some employers also refund some or all of the...
- Fri Mar 15, 2024 12:43 pm
- Forum: Non-US Investing
- Topic: Reporting IRA distribution/Roth conversion with a 1042-S instead of 1099-R
- Replies: 4
- Views: 781
Re: Reporting IRA distribution/Roth conversion with a 1042-S instead of 1099-R
For future reference; I dug into this a little more and it turns out that Form 1099-R needs to be filed/attached with the return "only if federal income tax is withheld in Box 4"; which typically wouldn't be the case for a Roth conversion. Which platform or provider is this? Vanguard have recently decided that they will ride roughshod over the US/UK treaty, and state that they will now withhold 30% for US tax on Roth IRA withdrawals . Although I haven't queried it directly (yet), there's a strong possibility then that they will also start withholding 30% for US tax on Roth conversions . In which case, if there is no viable route to recover some or all of that on a 1040-NR, things become extremely difficult. * File a mock 1099-R i...
- Fri Mar 15, 2024 9:08 am
- Forum: Non-US Investing
- Topic: Gold As An Emergency Fund In A Country With Insane Inflation
- Replies: 30
- Views: 3624
Re: Gold As An Emergency Fund In A Country With Insane Inflation
Most if not all of this return disparity will be down to the hugely volatile USD/TRY exchange rate. Currently at 459% gain over five years, and 2,079% since 2006.SheetrockBobby wrote: ↑Fri Mar 15, 2024 6:11 amI know what you mean and I don’t disagree with the general point, but gold priced in Turkish lira has had a much better return than gold/USD, ...
- Fri Mar 15, 2024 3:44 am
- Forum: Non-US Investing
- Topic: Understanding taxes for retired US citizen living in UK
- Replies: 24
- Views: 2834
Re: Understanding taxes for retired US citizen living in UK
I guess one potential method of hedging, if the USD/GBP rate is favorable at the point of retirement, would be to withdraw all of my USD Roth funds in one fell swoop and transferring the lot to GBP... Theoretically there should be no taxes on either side, but I'd want to wait for a really good exchange rate.... If you are determined to fully hedge to GBP in one single event (that is, to fix a given USD/GBP rate), better would be to move your Roth holdings into GBP assets, but leave them inside the Roth. You could use a UK stocks ETF (perhaps EWU or FLGB ), or at the extreme a GBP cash or ultra-short GBP bond fund. Keeping everything inside the Roth wrapper means you don't face US and UK tax on subsequent gains. That aside, if you hold a gl...
- Thu Mar 14, 2024 5:49 pm
- Forum: Non-US Investing
- Topic: Reporting IRA distribution/Roth conversion with a 1042-S instead of 1099-R
- Replies: 4
- Views: 781
Re: Reporting IRA distribution/Roth conversion with a 1042-S instead of 1099-R
Welcome to the forum.
I don't know, sorry. But I'm hoping that someone else does. (Worst case, perhaps form 4852? Just a guess, I'm afraid.)salocin wrote: ↑Wed Mar 13, 2024 3:39 pm I am now preparing my US tax return (1040-NR) and trying to complete Form 8606; but all the instructions I can find seem to suggest that I need a 1099-R (and TaxAct requires it to complete Form 8606). As an NRA, my broker does not issue 1099s but rather a 1042-S, which is of no use to trigger/file Form 8606.
How would one go about reporting the nondeductible IRA contribution and the Roth conversion in the absence of a 1099-R?
- Thu Mar 14, 2024 5:40 pm
- Forum: Non-US Investing
- Topic: UK Vanguard user FSCS
- Replies: 3
- Views: 537
Re: UK Vanguard user FSCS
Welcome.
For more, see: Maximising FSCS protection for your investment portfolio - Monevator
In short, no. The FSCS covers UK domiciled OEICs and unit trusts, but nothing non-UK domiciled. All of Vanguard's ETFs marketed to UK investors will be domiciled in Ireland. (Also, be aware that a few of Vanguard's OEICs are Ireland domiciled, not UK domiciled, and so will presumably similarly lack FSCS protection.)
For more, see: Maximising FSCS protection for your investment portfolio - Monevator
- Wed Mar 13, 2024 4:48 am
- Forum: Non-US Investing
- Topic: Understanding taxes for retired US citizen living in UK
- Replies: 24
- Views: 2834
Re: Understanding taxes for retired US citizen living in UK
Thanks for the explanation, that does all make sense. By which I assume you mean that you see the how of things. The why , of course, makes no sense at all. :-) So let's say at the point I retire the UK personal allowance is £20k, and the "basic" 20% tax rate goes up to £90k. If my expenses at that point are around £120k, I can use a combination of SS (around £60k), £30k from my Traditional funds, and £30k from my Roth funds to at least keep my tax burden to £14k (20% of the £70k taxable income above the personal allowance). Is that correct? Really shows the advantage of putting as much of my retirement money as possible in Roth accounts... Too many assumptions and far too much extrapolation and speculation to be in any way sure ...
- Wed Mar 13, 2024 4:02 am
- Forum: Non-US Investing
- Topic: Understanding taxes for retired US citizen living in UK
- Replies: 24
- Views: 2834
Re: Understanding taxes for retired US citizen living in UK
Yes, it's incorrect. The culprit is the treaty 'saving clause' (treaty Article 1 paragraph 4). This negates nearly all the treaty for US citizens specifically. How does the saving clause negate the treaty? I've read that in a few places but I've never seen any details on it... Article 1 paragraph 4 of the US/UK treaty reads: 4. Notwithstanding any provision of this Convention except paragraph 5 of this Article, a Contracting State may tax its residents (as determined under Article 4 (Residence)), and by reason of citizenship may tax its citizens, as if this Convention had not come into effect. In plain English, if you are a US citizen or green card holder, for you specifically, the US is free to entirely ignore the treaty and so apply its ...
- Tue Mar 12, 2024 6:58 pm
- Forum: Non-US Investing
- Topic: Understanding taxes for retired US citizen living in UK
- Replies: 24
- Views: 2834
Re: Understanding taxes for retired US citizen living in UK
Yes, it's incorrect. The culprit is the treaty 'saving clause' (treaty Article 1 paragraph 4). This negates nearly all the treaty for US citizens specifically.
- Sat Mar 09, 2024 2:28 am
- Forum: Non-US Investing
- Topic: Understanding taxes for retired US citizen living in UK
- Replies: 24
- Views: 2834
Re: Understanding taxes for retired US citizen living in UK
Further thoughts ... 1) 401k/IRA withdrawal. Is it taxed at 20% UK and 12% US, i.e. a net taxation of 32%? Or is it taxed at 12% US and the net taxed as income at 20% UK? Does FTC apply? Something else entirely? The US/UK treaty generally reserves primary tax rights to the country of residence (UK), so this example should come out to 20% UK and 0% US, by taking a US FTC equal to 12% using income 're-sourcing'. As a rule, on your income and gains you will end up with the lowest of the two countries' tax allowances, and paying the highest of the two countries' tax rates. The culprit is the US's treaty 'saving clause', Article 1 paragraph 4, which effectively nullifies most of the treaty specifically for US citizens (and US green card holders)...
- Fri Mar 08, 2024 4:53 pm
- Forum: Non-US Investing
- Topic: Understanding taxes for retired US citizen living in UK
- Replies: 24
- Views: 2834
Re: Understanding taxes for retired US citizen living in UK
The income tax treaty and the foreign tax credit should avoid double tax. The application of the UK inheritance tax is complicated. You may wish to consult with UK trusts and estates counsel. Whenever we do planning for U.S. persons living in the UK, we coordinate with UK counsel. Thanks for the reply. Inheritance tax is not of concern and your comment on the tax treaty, "should avoid double taxation" is exactly the issue as I keep reading conflicting info on this as it relates 401k and IRA withdrawals... The "secret sauce" you are looking for is " certain income resourced by treaty ". Essentially, the process makes you 'pretend' that enough of your US source income is actually non-US (in this case, UK) source...
- Fri Mar 08, 2024 5:29 am
- Forum: Non-US Investing
- Topic: Vanguard makes life difficult for NRAs in the UK and India
- Replies: 13
- Views: 4250
Re: Vanguard makes life difficult for NRAs in the UK and India
I only asked in the context of my own situation; that is, Roth IRA holder, US nonresident alien, and UK resident.bagle wrote: ↑Fri Mar 08, 2024 3:55 amDo you mean every Roth IRA held with Vanguard irrespective of the client's country of residency (or only for residents of the UK or India)?TedSwippet wrote: ↑Thu Mar 07, 2024 10:21 am And now Vanguard have answered. Yes, they will withhold 30% for US tax on every Roth IRA withdrawal.
Because Vanguard's original mail was directed at residents of both the UK and India, it's reasonable to assume that they plan to withhold 30% of all Roth IRA withdrawals for residents of the UK and India. No idea what they'd do for other countries, treaty or otherwise, so we can't extrapolate or infer anything beyond what they've stated.
- Thu Mar 07, 2024 11:19 am
- Forum: Non-US Investing
- Topic: Is there a European version of Vanguard?
- Replies: 6
- Views: 3757
Re: Is there a European version of Vanguard?
To me that begs the question: If the US insists on taxing gains for someone who is a green card holder and not even a citizen, does Austria insist on taxing for money invested "abroad" (EG in the US)? As long as your wife is not resident in Austria, she won't have to pay Austrian tax on any non-Austria sourced income. Only the US and Eritrea(*) tax the worldwide income of their non-resident citizens -- and in the case of the US, also their non-resident green card holders. Austria follows the rest of the world in taxing only residents and, in limited circumstances, income paid to nonresidents that arises in Austria. Austria - Individual - Taxes on personal income (*) Eritrea's tax regime for its expat citizens is benign by compari...
- Thu Mar 07, 2024 10:21 am
- Forum: Non-US Investing
- Topic: Vanguard makes life difficult for NRAs in the UK and India
- Replies: 13
- Views: 4250
Re: Vanguard makes life difficult for NRAs in the UK and India
And now Vanguard have answered. Yes, they will withhold 30% for US tax on every Roth IRA withdrawal. Insane, not to mention pointless.
- Sun Mar 03, 2024 7:49 am
- Forum: Non-US Investing
- Topic: Vanguard makes life difficult for NRAs in the UK and India
- Replies: 13
- Views: 4250
- Wed Feb 28, 2024 6:54 am
- Forum: Non-US Investing
- Topic: Moved out of the US - Vanguard requires USCIS form I-407 for IRA
- Replies: 10
- Views: 4354
Re: Moved out of the US - Vanguard requires USCIS form I-407 for IRA
I'm just tempted to collapse my plan early in the year ... and pay the penalty. I never thought I'd write this, but I've been having similar thoughts. I have a cell in my finance spreadsheet that shows me the (usually insanely large) tax cost of " bugging out " on something. That is, of deciding to sell up entirely and pull out of some investment; UK pensions, US pensions, current stock fund holdings, and so on. The aim is for its terrifying magnitude to dissuade me from taking any hasty decisions. With each erosion in the usefulness of US accounts though, the annoyance to tax cost ratio edges closer to just wanting rid of the entire thing. I'm not there yet, probably not close, but I can certainly feel the attraction building. A...
- Tue Feb 27, 2024 9:36 am
- Forum: Non-US Investing
- Topic: Using up wife's ISA allowance
- Replies: 17
- Views: 3404
Re: Using up wife's ISA allowance
If you’re not living together or the asset involved is trading stock , any asset transferred between you is treated as transferred at its market value at the time of the transfer. Is this the conflicting part? It's the bit that has always bugged me. Ie my ETF I want to minimise CGT on would be classed as "trading stock"? Multiple non-HMRC sites all seem fairly clear and in agreement on share transfers between spouses not being taxable to capital gains, so ... I did a bit more digging. It seems that HMRC's casual use of "trading stock" actually has a specific meaning: 504-050 Disposals between spouses and civil partners | Croner-i Tax and Accounting Exceptions to the no gain/no loss rule apply where (TCGA 1992, s. 58(2))...
- Tue Feb 27, 2024 5:39 am
- Forum: Non-US Investing
- Topic: Using up wife's ISA allowance
- Replies: 17
- Views: 3404
Re: Using up wife's ISA allowance
The base cost for CGT purposes is what the husband originally bought the shares at. As with anything involving CGT, good records are key. I don't know the precise answer to this -- never been in a position to do it personally -- but whenever I've looked there seem to be conflicting answers. For example: Splitting assets with your other half can reduce Capital Gains Tax | St. James’s Place Can giving assets to my spouse or civil partner cut our CGT bill? If the sale of an asset is going to take you over your £6,000 CGT allowance and land you with a tax bill, you can give the asset to your spouse or civil partner – so long as they haven’t already used up their allowance. They can then sell it and use their own £6,000 annual allowance. This m...
- Tue Feb 27, 2024 3:28 am
- Forum: Non-US Investing
- Topic: Using up wife's ISA allowance
- Replies: 17
- Views: 3404
Re: Using up wife's ISA allowance
This might apply: Marriage Allowance: How it works - GOV.UKalwaysonit wrote: ↑Tue Feb 27, 2024 3:10 am The only way to use up her allowances is to transfer her the funds (tax free gift) to invest?
Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner.
This reduces their tax by up to £252 in the tax year (6 April to 5 April the next year).
Right. Aside from the above, you have to finagle ways to transfer income to your wife. Gifting, joint accounts, that sort of thing. (Or become an MP so you can then "employ" your wife.)alwaysonit wrote: ↑Tue Feb 27, 2024 3:10 am From my understanding we cannot be jointly assessed (which would mean I can use up her allowances without transferring the funds to her name)?
- Mon Feb 26, 2024 2:39 am
- Forum: Non-US Investing
- Topic: UK Investor - portfolio review
- Replies: 38
- Views: 5235
Re: UK Investor - portfolio review
Welcome. A few comments below. Overall, I feel okay to overweight US equity exposure up to 70-75% of equity. My understanding is that it is a sound strategy to even ignore everything except the US, at least for US investors. There could be some nuances for non-US investors (e.g. withholding tax, currency risk), but I don’t think they apply to my case. What is it that you think does not apply? That is, why do you think it may be appropriate for you to invest as if you are US based? Global Small Caps are removed in favour of US Small Cap Value because I wanted to place a small bet on small cap value premium. My thinking is that even if it does not work it seems unlikely that US Small Cap will lose to Global Small Cap. In other words I won’t l...
- Sun Feb 25, 2024 3:37 am
- Forum: Non-US Investing
- Topic: Tax-Loss Harvesting if Moving Abroad
- Replies: 6
- Views: 2582
Re: Tax-Loss Harvesting if Moving Abroad
Almost certainly it will not, although to be sure you would have to fully research Czech domestic tax law and also the US/Czech tax treaty.Underscore wrote: ↑Sat Feb 24, 2024 5:56 pm I'm wondering if the Czech government will not respect my US-accrued capital losses, ...
As a general rule, countries will happily tax capital gains realised after you become resident, but not capital gains realised before becoming resident. Symmetrically, they will recognise and credit losses realised after you become resident, but not losses realised before becoming resident.
In countries with territorial and residence based taxation -- that is, practically everywhere except for the US and Eritrea -- only what you do when you are a tax resident counts.
- Fri Feb 23, 2024 10:21 am
- Forum: Non-US Investing
- Topic: Interest on cash balance vs. short term bonds
- Replies: 7
- Views: 3431
Re: Interest on cash balance vs. short term bonds
Right. The OP's sig suggests UAE, which has neither US income tax treaty nor US estate tax treaty.Hyperborea wrote: ↑Fri Feb 23, 2024 9:50 am Cash held at a brokerage is subject to US estate tax. It won't impact you (you have to be dead for the estate tax issue) but it will impact your heirs (spouse, children, parents, etc.). This will also depend on if your country of residence has an estate tax treaty with the US. If not try to keep the cash balance below US$60K.
Nay, then. (Although, perhaps shaded by which IB country the account is based in.)
- Thu Feb 22, 2024 4:34 pm
- Forum: Non-US Investing
- Topic: Moved to the US. Didn't know about PFICs
- Replies: 1
- Views: 2279
Re: Moved to the US. Didn't know about PFICs
Welcome to the forum. I moved to the US in November 2022. I had 3 ETFs with Degiro and decided to sell them this year because Degiro doesn't provide a 1099-int/div form and it was going to be annoying to deal with taxes. If you haven't already seen it, this wiki article might be a useful read: US tax pitfalls for a non-US person moving to the US It is too late now for any pre-immigration planning, but some things (like PFIC) worsen with time, so even if you've missed something, knowing about it now might save you a lot of trouble later on. - My broker still considers me an EU resident (I think I have to file a special form with them but haven't done so). I plan to close the account anyway, do I need to update this? Not sure what this is. A ...
- Thu Feb 22, 2024 4:56 am
- Forum: Non-US Investing
- Topic: Vanguard makes life difficult for NRAs in the UK and India
- Replies: 13
- Views: 4250
Re: Vanguard makes life difficult for NRAs in the UK and India
What is the definition of a non-lump sum distribution then? Precisely. The original aim of the 'lump sum' clause was to close off a "loophole" whereby the UK traditionally did not tax (foreign?) whole-pension lump sums, and under other clauses neither would the US. Clearly the US couldn't possibly accept this, hence this special 'lump sum' clause. This UK tax loophole is apparently long since closed, but the treaty clause remains. The following discussion with HMRC is one that covers this area. It is notable for the confusion it generates. HMRC appears to reverse its position several times, cannot accurately address detailed scenarios provided, conflates interest with pension withdrawals, attempts what may be an authoritative rep...
- Wed Feb 21, 2024 10:26 am
- Forum: Non-US Investing
- Topic: Vanguard makes life difficult for NRAs in the UK and India
- Replies: 13
- Views: 4250
Vanguard makes life difficult for NRAs in the UK and India
Just received, by email: We're writing to inform you of an update to the U.S. tax withholding rate for distributions from your IRA at Vanguard. A nonresident alien is an individual who's not a U.S. citizen or a resident of the U.S. Nonresident aliens are subject to U.S. income tax on income from sources within the U.S. In general, nonresident aliens who are citizens of the United Kingdom and India are subject to a 30% tax withholding rate on IRA withdrawals. The income tax treaties between the U.S. and the United Kingdom and India do permit plan administrators to apply a reduced withholding rate to distributions that aren't lump-sum distributions; however, there's no clear definition of a lump-sum distribution. So, to be conservative, as of...
- Wed Feb 21, 2024 6:58 am
- Forum: Non-US Investing
- Topic: How to invest while living in Japan as a dual Japanese/US citizen without getting into major tax trouble?
- Replies: 9
- Views: 3439
Re: How to invest while living in Japan as a dual Japanese/US citizen without getting into major tax trouble?
Not Japanese or a resident of Japan, but ... a few pointers below that might help. So I'm a Japanese/US dual citizen and after living my whole life in the US, I finally decided to move and live in Japan for good. I understand the importance of saving for retirement, and I have about 150K saved so far in an IRA, Roth, and HSA. However, after doing some research, it seems that I might not really have any options for saving for retirement anymore now that I have moved to Japan. The following wiki page hasn't been updated in quite a while, but might be a useful starting point: - Investing from Japan for US citizens and US permanent residents - Bogleheads More generally: - US tax pitfalls for a US person living abroad - Bogleheads - Taxation as ...
- Tue Feb 20, 2024 7:50 am
- Forum: Non-US Investing
- Topic: Non-Resident UK Citizen – My Plan for consolidating small pensions[UK]
- Replies: 12
- Views: 3242
Re: Non-Resident UK Citizen – My Plan for consolidating small pensions[UK]
The actual text from that page reads: You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. ... You’ll then have 6 months to start taking the remaining 75% , which you’ll usually pay tax on. It does. And I think it's either misleading, or just plain wrong. From other (admittedly, non-government) sources: Pension Drawdown Rules | How Does Pension Drawdown Work? Choosing your income in drawdown You’re in control of how much income you take and when. You might decide you don’t need an income straight away, or even at all. You might just want to take your tax-free cash. If you do want an income, you can choose to take regular withdrawals or just dip into the pot as and when you need to - it’s up to you. W...
- Sun Feb 18, 2024 6:52 am
- Forum: Non-US Investing
- Topic: Maintaining US brokerage account
- Replies: 13
- Views: 3229
Re: Maintaining US brokerage account
Mostly my ETFs are Vanguard. How does HMRC know I disposed off non reporting ETFs. I can't find a place in the Self Assessment to report what etfs were disposed off. https://www.gov.uk/government/publications/offshore-funds-self-assessment-helpsheet-hs265/hs265-offshore-funds#what-happens-when-i-dispose-of-my-sharesunits-in-a-non-reporting-offshore-fund What happens when I dispose of my shares/units in a non-reporting offshore fund? If you dispose of your shares/units in a non-reporting offshore fund, any gain you realise will normally be treated as an ‘offshore income gain’ unless an exception applies in which case consult the Investment Funds Manual. You will be subject to income tax, rather than capital gains tax, on any offshore income...
- Sat Feb 17, 2024 2:36 am
- Forum: Non-US Investing
- Topic: Maintaining US brokerage account
- Replies: 13
- Views: 3229
Re: Maintaining US brokerage account
Do you renew solely the W 8ben every three years? Vanguard requires me to submit each round documentation such as Passport. I have been doing this since 2006 every 3 years. My German passport is valid for 10 years. Nevertheless each time same procedure. I send a document copy via secure message. Requires a lot of follow up to get coordinated. Sometimes I get asked for a passport copy each time round this loop, sometimes not. From the outside, it looks random. I suspect mine might have been triggered by adding Wise to my Vanguard payments out, since this looks like a US based bank account, and standing instructions to send money to a US bank rings W-8BEN alarm bells. It also appears to depend a bit on account type. For example, I have to go...
- Fri Feb 16, 2024 4:31 pm
- Forum: Non-US Investing
- Topic: Maintaining US brokerage account
- Replies: 13
- Views: 3229
Re: Maintaining US brokerage account
I have taxable brokerage, IRA, Roth IRA and 401k. I plan to rollover my 401k to IRA and the convert to Roth IRA. I have individual stocks, etfs and mutual funds. How do I find off the etfs have UK reporting status? This wiki article lists the major US domiciled ETFs with UK 'reporting status': - US domiciled ETFs that are UK HMRC reporting funds - Bogleheads There are other ETFs , but the page above lists the ones most likely to appeal to index fund investors. I'm not aware of any US domiciled mutual funds with UK 'reporting status', so you might want to review any that you hold in your taxable account; they are okay though if in a 401k, IRA, or similar retirement account. Can you also please clarify what is the unfavourable treatment in U...
- Fri Feb 16, 2024 11:25 am
- Forum: Non-US Investing
- Topic: Maintaining US brokerage account
- Replies: 13
- Views: 3229
Re: Maintaining US brokerage account
Welcome to the forum. The question I have - is there a downside to not file W8-BEN and continue to receive 1099s and file 1040NR every year? The obvious downside is the PITA of having to file a US 1040-NR every year. As one data point, I filed my first W-8BEN with Vanguard in 2008, renewed every three years or so, and so far, so good. I still hold IRA, 401k, and taxable accounts there. No brokerage option, so mutual fund only, but for the most part it works fine. No direct experience with Fidelity, but from memory a few folk hereabouts have reported that they also haven't had issues with them over being in the UK (maybe try a forum search?). It seems to make a difference which non-US country you live in. Canadians in particular seem to have...
- Fri Feb 16, 2024 3:00 am
- Forum: Non-US Investing
- Topic: US shares trading on European exchanges
- Replies: 3
- Views: 3122
Re: US shares trading on European exchanges
Symmetrically, American Depositary Receipts (ADRs) traded on the NYSE are not 'US situs'. Analysis in PLR 200243031.
It's a minefield, isn't it?
- Thu Feb 15, 2024 3:09 am
- Forum: Non-US Investing
- Topic: Non-Resident UK Citizen – My Plan for consolidating small pensions[UK]
- Replies: 12
- Views: 3242
Re: Non-Resident UK Citizen – My Plan for consolidating small pensions[UK]
**And in case any future readers of this post find applicable** - I have just remembered, however, I'll need to make a note when filing annual US tax returns to check my Standard Life pension balance, including as necessary for Foreign Assets reporting requirements. I've realised I've completely forgot about these pensions. Although, given these paltry balances fall well within the current $50k/$100k threshold (single/married)- I should be good, and will be for some time to come! Ahem. FBAR , aka FinCEN 114. From Greenback Tax Services : Foreign Pensions and FBAR Americans who have $10,000 deposited in one or more non-US financial accounts are required to file a Foreign Bank Account Report (FBAR). The FBAR was designed to combat tax evasio...
- Wed Feb 14, 2024 4:27 pm
- Forum: Non-US Investing
- Topic: Moving from the US to the UK: 401k and Money Transfer Questions
- Replies: 5
- Views: 3280
Re: Moving from the US to the UK: 401k and Money Transfer Questions
I am new to investing, and am a non-US and non-UK citizen, been living in the US for ~7 years. I am planning to move to the UK next month. Green card holder? If yes, any threat from the US's abominable 'exit tax'? 1) I plan on transferring money (income earned from: i. wages from a job and ii. vested RSUs in the US) from the US to UK by April 2024 i.e. prior to me becoming a UK resident. Will this transferred money be taxed in the UK? Assuming this is all post-tax (net) saved earnings, no. You may face UK tax on gains when you sell these vested RSU stocks, but only under normal UK capital gains tax rules. ( Unvested RSUs and any unvested stock options are more complicated). How much prior to becoming a UK resident? Remember that the US has...
- Wed Feb 14, 2024 4:15 pm
- Forum: Non-US Investing
- Topic: US Resident Moving to the UK, Question on ETFs
- Replies: 2
- Views: 2655
Re: US Resident Moving to the UK, Question on ETFs
I am new to investing, and am a non-US and non-UK citizen, I've been living in the US for ~7 years. I am planning to move to the UK next month. Is it worth holding onto US domiciled HMRC reporting ETFs (VTI, VOO) or should I sell them prior to my move to the UK? Potentially useful wiki article: US tax pitfalls for a non-US person moving to the US - Permanently leaving the US 1. Is it worth holding the ETFs given the implications of GBP/USD tax conversion and different ways US & UK capital gains are taxed? As a non-US citizen (and presumably, also not a green card holder? please confirm) you shed your US tax obligations the second you move out of the US and become a UK resident. US domiciled ETFs that have 'reporting status' are okay to...
- Wed Feb 14, 2024 6:18 am
- Forum: Non-US Investing
- Topic: NRA invested in Irish domeciled ETFs - 8 year rule?
- Replies: 4
- Views: 1974
Re: NRA invested in Irish domeciled ETFs - 8 year rule?
My confusion about missing out is that while I'm in some nice Irish ETFs it seems that some US ETFs perform better ... But do they? Aside from any small difference in the ETF's annual charge, an Ireland domiciled ETF holding S&P 500 stocks and a US domiciled ETF holding the exact same S&P 500 stocks will perform identically . Their assets grow by the same amount, and their stocks pay the ETF the same annual dividends. However, it can sometimes appear that they do not, and the way the US applies its tax to dividend payments, perhaps with the added complication of exchange rates, is what makes it look this way. For a US domiciled ETF, the ETF receives its dividends from the stocks it holds without any US tax, but then the broker take...
- Tue Feb 13, 2024 11:27 am
- Forum: Non-US Investing
- Topic: Portfolio feedback (Beginner)
- Replies: 4
- Views: 1523
Re: Portfolio feedback (Beginner)
Exempted from paying taxes on capital gains, but I do have to pay taxes (30%) on dividends . You could cut this to between 15% and 0% by using non-US domiciled funds. Thanks for the link. I'm fully aware of the 40% estate tax on my holdings, but it's not a major concern as I have a few strategies. These include shifting to lower-risk Irish-domiciled funds closer to retirement, ... Nobody plans to die before retirement, but some do nevertheless. Sometimes long before. ... joint accounts, account sharing, etc. This is unsound, and likely not to work in the way you hope. From Deloitte : If the surviving spouse is not a US citizen, in general, the portion of jointly owned property that is taxed in the estate of the first spouse to die is based...
- Mon Feb 12, 2024 5:11 pm
- Forum: Non-US Investing
- Topic: Portfolio feedback (Beginner)
- Replies: 4
- Views: 1523
Re: Portfolio feedback (Beginner)
I'm new to investing ... Welcome to the forum. If you haven't already found it, our wiki contains a lot of information for new investors. Investing from Singapore could be particularly relevant to you. Can we assume you are a non-US person this means not a US citizen or green card holder). If you are a US expat resident in Singapore some of your funds are trouble. Conversely, if you are not a US citizen, the others of your funds are trouble. The basic rule is: US citizens can realistically only use US domiciled funds; non-US citizens generally very much want to avoid US domiciled funds. This wiki article is a good starting point for uncovering the bulk of the US tax ugliness you might face: Non-US investor's guide to navigating US tax trap...
- Mon Feb 12, 2024 2:52 am
- Forum: Non-US Investing
- Topic: Form 3250 [US green card holder. Does IRS Form 3250 need to be filed?]
- Replies: 3
- Views: 1222
Re: Form 3250 [US green card holder. Does IRS Form 3250 need to be filed?]
Potentially useful wiki article: US tax pitfalls for a non-US person moving to the US
On the facts given, no. She transferred her own money; this is neither a gift nor a bequest.
(For the benefit of other readers, as edited above, the foreign gifts and bequests report is actually form 3520, not 3250.)
- Sat Feb 10, 2024 2:22 pm
- Forum: Non-US Investing
- Topic: US Citizen relocating to the EU: how to keep and manage assets in the US?
- Replies: 6
- Views: 2451
Re: US Citizen relocating to the EU: how to keep and manage assets in the US?
Indeed. From a wiki footnote:
The US really does make life difficult for its expats, doesn't it?Practically every non-US domiciled fund and ETF will be a US PFIC. As a quick way to tell, if it has 'UCITS' somewhere in its name, it is European domiciled and so a PFIC. Aside from reading its prospectus, KID, or fund documents, the other unambiguous way you can tell is to find its ISIN. If the first two letters are not 'US', it is almost certainly a US PFIC for tax purposes. Most UCITS funds are domiciled in either Ireland, with ISIN code 'IE', or Luxembourg, with ISIN code 'LU'.
- Sat Feb 10, 2024 1:57 pm
- Forum: Non-US Investing
- Topic: US Citizen relocating to the EU: how to keep and manage assets in the US?
- Replies: 6
- Views: 2451
Re: US Citizen relocating to the EU: how to keep and manage assets in the US?
If I decided to keep self-managing my assets, my understanding is that I would have to purchase UCITs instead of your regular US-domiciled ETFs. Am I correct that the main drawback of UCITs (other than a limited list of UCITs to choose from) is another level of taxation? Not really. Your main problem, by a country mile, is US tax. Specifically, the way that the US will tax you for holding non-US domiciled funds and ETFs. Unlike practically every other country, the US taxes its citizens (you) no matter where they live on the planet. And it has a particularly savage and spiteful tax regime for taxing 'offshore' (that is, non-US domiciled) funds, one that will nearly always leave you worse off than otherwise. In the worst cases, PFIC tax can ...