Tax implications of investing through London Stock Exchange for non-resident investors

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pcabraham
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Tax implications of investing through London Stock Exchange for non-resident investors

Post by pcabraham » Tue Jun 13, 2017 2:53 am

I am a Singapore citizen and live in Singapore. I have been considering investing in Irish domiciled ETFs through the London Stock Exchange - specifically the iShares Core MSCI World UCITS ETF (IWDA). However, I have not been able to find good information on the tax implications of this. Specifically, the question I have is this - what are the tax implications (income tax, capital gains tax, estate duties) of investing in Irish domiciled ETFs through the London Stock Exchange for investors who are not UK residents?

The research I have done suggests that there is a 15% withholding tax on dividends, there is no capital gains tax, and estate duties at 40% are levied on the portion of the estate exceeding GBP 325,000 in value. Is this correct? If any of you have dealt with this issue and have any insights, I would appreciate your thoughts.

msk
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by msk » Tue Jun 13, 2017 4:20 am

IWDA is accumulative and does not pay dividends, hence any dividend tax that is paid by iShares within each sub-holding of shares in numerous jurisdictions worldwide is never available to you anyway. For you, No dividends, No income tax. I have recently sold a large chunk of IWDA with a profit and so far I have not heard any mention of capital gains tax. Of course I can only be sure I have nil tax liability after a full annual cycle. Like you, I live in a jurisdiction that has neither capital gains tax nor personal income tax. I hold IWDA via Internet Brokers and via Baader Bank in Germany. Because IWDA is not situs in the USA and I am neither a US citizen nor a US resident, nor a UK domiciled, nor a UK resident I do not see how a USA or a UK inheritance tax would apply to me. I believe that IWDA is in fact Ireland situs (see SWDA) though traded in the London and Amstredam stock exchanges, among others. Please explain why you are worried about UK inheritance tax. My understanding is that applies to stuff like if you own UK Real Estate or a business in the UK. You suspect that it also applies to shares (and cash in a bank account?). Never heard of that. My holding via Baader Bank is also, as far as I know, also shielded from German inheritance tax, if they have any. Perhaps check if you cannot simply purchase either SWDA or IWDA (same thing) directly on the Singapore Stock Exchange. The currency it trades in locally does not matter, even if it is Singapore $.

msk
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by msk » Tue Jun 13, 2017 4:24 am

To insulate myself further from any smell of inheritance tax, my IB account is jointly owned with my wife (with survivor rights). Her residency status is similar to mine.

TedSwippet
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by TedSwippet » Tue Jun 13, 2017 7:32 am

pcabraham wrote:...what are the tax implications (income tax, capital gains tax, estate duties) of investing in Irish domiciled ETFs through the London Stock Exchange for investors who are not UK residents?
None, none and none. The UK does not tax dividends paid to non-residents, nor does Ireland. No UK or Irish capital gains tax. And UK and Irish inheritance taxes would not apply here to non-residents of those countries.
pcabraham wrote:The research I have done suggests that there is a 15% withholding tax on dividends, there is no capital gains tax, and estate duties at 40% are levied on the portion of the estate exceeding GBP 325,000 in value. Is this correct?
Happily no, this isn't right. The US applies its estate tax to its own country's funds and domiciled ETFs when held by non-residents. But other countries do not, UK and Ireland included. So again, no UK or Irish estate/inheritance tax worries for this case, then.
Last edited by TedSwippet on Sat Sep 09, 2017 2:15 pm, edited 1 time in total.

Caduceus
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Caduceus » Tue Jun 13, 2017 10:06 am

You are subjected to three different tax regimes in the example you give. There is a 15% dividend tax for some of the stocks in the fund that you own, but it may not be immediately obvious to you. In your case, you are a citizen of Singapore who invests in a fund that is domiciled in Ireland, and that holds US stocks (let's just say the U.S. to simplify the analysis), so the U.S., Ireland, and Singapore each potentially takes a tax bite from your investments. That this is the London Stock Exchange is not relevant. What is relevant is the original domicile of the actual holding, the domicile of the investment "container", and your own tax residency status. The London Stock Exchange is just the market.

On the U.S. level, when dividends are paid out to the fund (even if the Irish-domiciled fund never pays them out to you but re-invests them), there is an actual dividend tax levied of 15% because that is the treaty rate that any Irish-domiciled investments are subjected to in relation to its holding of U.S. companies. So, if the fund holds 1,000,000 shares of Exxon Mobil, then 15% of (1,000,000 x 0.75) is paid to the U.S. every quarter. This process is largely invisible to you. If you were a U.S. citizen or a non-US resident alien holding the same 1,000,000 shares of Exxon Mobil in a IRA or 401k, you would pay no dividend tax. If you were a citizen of Singapore holding Exxon Mobil directly, a quick look at the tax treaty table shows you would have 30% of tax withheld from dividends at source (which also amounts to actual tax.) As for capital gains, U.S. generally does not levy capital gains on non-U.S. entities, so your Irish-domiciled fund would not incur capital gains tax bite when it buys and sells the fund.

On the Irish level, as far as I know, Ireland does not tax dividends or capital gains to non-resident investors, which is why there are so many Irish-domiciled funds.

And then, finally, you have to figure out how your home country (in your case, Singapore) taxes foreign dividends and capital gains. That, I don't know.

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Hyperborea
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hyperborea » Tue Jun 13, 2017 10:46 am

This setup of holding Irish domiciled ETFs bought on the LSE using an account at Interactive Brokers (possibly a London based account) is what I'm planning to move into over the next couple of years as I expatriate from the US. Does anybody see any potential for Brexit to put an end to this? Will the loss of "passporting" rights stop those Irish ETFs being sold on the LSE? Are there other exchanges that work as well?

TedSwippet
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by TedSwippet » Tue Jun 13, 2017 11:55 am

Hyperborea wrote:Does anybody see any potential for Brexit to put an end to this? Will the loss of "passporting" rights stop those Irish ETFs being sold on the LSE?
I can see the potential for it, but to be honest I can't imagine that Brexit negotiations wouldn't find a way to maintain the status quo for UCITS investment vehicles sold to UK retail investors. Worst case, I guess you would have to trade these ETFs through Euronext or SIX Swiss if they disappear from the LSE.

As far as I can tell that shouldn't affect any holding you have, though this is of course uncharted territory. (Also unplanned territory, from the look of thing from the UK side so far.) Shrug.

Are you moving to the UK (or another country with equivalent US income tax and US estate tax treaties)? If yes, you could also use US domiciled ETFs without issues, since the UK/US tax treaties provide you with comparable US tax rates on dividends and decent insulation from US estate taxes. This isn't the case for the OP -- Singapore has no tax treaties with the US.

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Hyperborea
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hyperborea » Wed Jun 14, 2017 1:32 am

TedSwippet wrote:Are you moving to the UK (or another country with equivalent US income tax and US estate tax treaties)? If yes, you could also use US domiciled ETFs without issues, since the UK/US tax treaties provide you with comparable US tax rates on dividends and decent insulation from US estate taxes. This isn't the case for the OP -- Singapore has no tax treaties with the US.
I'll be spending 2-5 years in Japan and then probably (though fuzzier since it's further away) a fair bit of time based in Portugal. Neither of which has a newer style estate tax treaty with the US. Also, I can avoid paying taxes on earnings kept outside of Japan for up to 5 years which is the max I'll be staying. Portugal allows certain kinds of earnings to be tax free in Portugal for up to 10 years (non-habitual resident). Given that I don't want to be paying US tax that I don't have to nor be potentially subject to US estate tax (or have my wife in that situation).

The current Irish domiciled ETFs sold on the LSE fits the bill perfectly but I've been a bit worried that the May-bot may bodge that up.

pcabraham
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by pcabraham » Thu Jun 15, 2017 3:11 pm

I was able to talk to a financial advisor who has put his clients into Ireland domiciled ETFs and was therefore able to provide authoritative answers to the questions I had. His view is that, as long as you are not resident in either Ireland or the UK, you will not be liable to income tax, capital gains tax or estate duty if you invest in Ireland domiciled ETFs through the London Stock Exchange.

If you are not a tax resident of Ireland, you will not be liable to UK income tax on any dividends. The fact that you are buying the ETFs through the London Stock Exchange will not affect this. The UCITS rules allow ETFs to be sold through any European stock exchange.

UK Capital Gains tax will apply only if you are tax resident in the UK which might be the case if you have other assets there (such as property) or have been resident there in the past. If you are not resident in the UK, this is not an issue.

Similarly, you would not be liable for estate duties in the UK as long as you were not domiciled there.

He also did not feel that Brexit would affect any of that since, if the UK imposes any taxes on non-resident investors, it will damage its position as a financial hub.
Last edited by pcabraham on Thu Jun 15, 2017 4:15 pm, edited 1 time in total.

imperia
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by imperia » Thu Jun 15, 2017 3:56 pm

Hyperborea wrote:This setup of holding Irish domiciled ETFs bought on the LSE using an account at Interactive Brokers (possibly a London based account) is what I'm planning to move into over the next couple of years as I expatriate from the US. Does anybody see any potential for Brexit to put an end to this? Will the loss of "passporting" rights stop those Irish ETFs being sold on the LSE? Are there other exchanges that work as well?
Exchanges in Frankfurth, Amsterdam, Milano.
If you use IB iz is cheaper to use this exchange, especially if you use Euro.

Hortense
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hortense » Thu Sep 07, 2017 8:07 pm

Hi All. Google brought me here, and I think there are some important inaccuracies in the above replies, so let me give my 2c.

Non-UK domiciled persons are subject to UK inheritance tax on their UK-situated assets (similar to the US estate tax on "US-based" assets that applies to NRAs). Being a non-resident, non-UK-domiciled person means that rather than your whole estate, only your UK assets are taxed (and there are exemptions). So Irish ETFs would apparently be exempt if their registration of title occurs outside the UK. It is not generally true that persons who are not residents of the UK are exempt from UK inheritance tax. And you can also be a non-UK resident and still considered UK-domiciled for tax purposes (in case you were a resident in the past, and possibly in other cases I'm not aware of).

Here is the opinion of Mr. Lee Hudnam, a chartered accountant and a Chartered Tax Advisor:
As a non UK domiciliary you would only be subject to UK Inheritance tax ('IHT') on assets situated in the UK. Identifying the location of assets can be complex however the general rule is that a shareholding in a Company is located at the place where the title of ownership must be registered. Therefore it is the location of the share register that is crucial. On the assumption that the shares in your case are UK registered the value of the shareholdings (above the nil rate band) would be subject to UK inheritance tax.

Note however that there are special rules for overseas OEIC's and authorised investment trusts that can deem investments in these to be non UK situated for UK Inheritance tax purposes.
https://www.wealthprotectionreport.co.uk/public/804.cfm

This is from Her Majesty's government:
If your permanent home (‘domicile’) is abroad, Inheritance Tax is only paid on your UK assets, for example property or bank accounts you have in the UK.

It’s not paid on ‘excluded assets’ like:

- foreign currency accounts with a bank or the Post Office
- overseas pensions
- holdings in authorised unit trusts and open-ended investment companies
https://www.gov.uk/inheritance-tax/when ... he-uk-dies

Here is advice pertaining to South African investors (yes, they generally have to pay inheritance tax on LSE-listed stocks)
https://www.moneyweb.co.za/mymoney/mone ... us-shares/

I am not a lawyer.

TedSwippet
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by TedSwippet » Fri Sep 08, 2017 3:18 am

Hortense wrote:
Thu Sep 07, 2017 8:07 pm
Hi All. Google brought me here, and I think there are some important inaccuracies in the above replies, so let me give my 2c.
Thanks for taking the time to comment.

Overall, your findings confirm that non-UK and non-Irish investors who hold Ireland domiciled ETFs purchased through the London stock exchange will not suffer any form of UK or Irish inheritance, estate, dividend, or capital gains taxes.

This cannot necessarily be said for cases that go outside this boundary though -- direct investment in shares in UK companies might expose one to UK inheritance tax. But for index fund or ETF investors outside of the few countries that possess a US estate tax treaty, the position of Ireland domiciled ETFs is a good one, and certainly much better than investing through US domiciled ETFs.

Hortense
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hortense » Sat Sep 09, 2017 1:27 pm

Update: I've found it! Irish funds, as opposed to stocks, are tax-exempt when held by and transferred to non-residents of Ireland:
Transfers in units in Irish funds are exempt from Irish stamp duty. A gift or inheritance between foreign residents of units in an Irish fund is exempt from capital acquisitions tax (i.e. gift and inheritance tax).
http://www.algoodbody.com/insightspubli ... n_of_funds

Thanks for the discussion, it prompted me to keep digging until I found the answer.

I think you can disregard the rest of this long reply.

-------------------------------------
TedSwippet wrote:
Fri Sep 08, 2017 3:18 am
Hortense wrote:
Thu Sep 07, 2017 8:07 pm
Hi All. Google brought me here, and I think there are some important inaccuracies in the above replies, so let me give my 2c.
Thanks for taking the time to comment.

Overall, your findings confirm that non-UK and non-Irish investors who hold Ireland domiciled ETFs purchased through the London stock exchange will not suffer any form of UK or Irish inheritance, estate, dividend, or capital gains taxes.

This cannot necessarily be said for cases that go outside this boundary though -- direct investment in shares in UK companies might expose one to UK inheritance tax. But for index fund or ETF investors outside of the few countries that possess a US estate tax treaty, the position of Ireland domiciled ETFs is a good one, and certainly much better than investing through US domiciled ETFs.
I wish it were so. But as far as I can tell, inheritors are liable for Irish Capital Acquisitions Tax (CAT) on inheritance of Irish-situated assets, including the stocks of Irish companies, even when neither the deceased nor the inheritor is Irish resident. There is an exemption for spouses and a tax-free thresholds for everybody else, depending on the relation between the deceased and the inheritor. "Group A" beneficiaries, including children of the deceased, enjoy a tax-free threshold of 310,000 Euro. Above that, you apparently have to pay 33%. See e.g. Deloitte's "Taxation and Investment in Ireland 2017":
Gifts or inheritances of Irish-situated property remain within the charge to
CAT, regardless of the domicile or residence of the donor/deceased or beneficiary. Shares in Irish-
incorporated companies constitute Irish property for this purpose.
Also, from Deloitte's "International Estate and Inheritance tax Guide 2013":
With respect to gifts and inheritances received on or after 1 December 1999, a charge to CAT arises when:
• The disponer is resident or ordinarily resident in Ireland; or
• The beneficiary is resident or ordinarily resident in Ireland; or
• The gift or inheritance consists of Irish situate property.
If any one of these conditions is fulfilled, the gift or inheritance is within the charge to CAT.
This seems to be the rule rather than the exception: states with inheritance or estate tax charge non-residents on assets in those states. This seems to be the case in the US, the UK, Ireland, and France, at least.

The Irish Vanguard funds' prospectus claims there is some exception to this rule, however:
Irish capital acquisitions tax (at a rate of 33%) can apply to gifts or inheritances of Irish situate assets
or where either the person from whom the gift or inheritance is taken is Irish domiciled, resident or
ordinarily resident or the person taking the gift or inheritance is Irish resident or ordinarily resident.
The Shares could be treated as Irish situate assets because they have been issued by an Irish
company. However, any gift or inheritance of Shares will be exempt from Irish gift or inheritance tax
once:
1.
the Shares are comprised in the gift or inheritance both at the date of the gift or inheritance
and at the “valuation date” (as defined for Irish capital acquisitions tax purposes);
2.
the person from whom the gift or inheritance is taken is neither domiciled nor ordinarily
resident in Ireland at the date of the disposition; and
3.
the person taking the gift or inheritance is neither domiciled nor ordinarily resident in Ireland at
the date of the gift or inheritance.
(from the prospectus of Vanguard Investment Series Plc).

I have failed to locate an authoritative source for the existence of this exemption, however, and I don't fully understand what this legalese means. The Irish government helpfully provides a list of CAT exemptions here. Of which, the most pertinent at first glance seems to be the Business Relief, which reduces the taxable value of certain business properties by 90% - which should often bring the value of the inherited property below the beneficiary's threshold.

Alas, quoted shares usually do not qualify for the Business Relief, according to the Irish Govt's "Tax and Duty Manual - Business Relief". So I don't know where Vanguard got their theory that shares in their funds are exempt. I remain unconvinced that Irish ETFs held by non-Irish residents are exempt from inheritance tax.

Hortense
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hortense » Sat Sep 09, 2017 1:53 pm

And here it is from the Irish government:
CATCA 2003 s.75 provides an exemption from tax for gifts and inheritances of Units
of certain investment entities. Units held in collective investment schemes, common
contractual funds, investment limited partnerships or investment undertakings are
exempt from tax in cases where neither the disponer nor the donee or successor is
domiciled or ordinarily resident in the State.
www.revenue.ie/en/tax-professionals/tdm ... art23.pdf

TedSwippet
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by TedSwippet » Sat Sep 09, 2017 2:29 pm

Hortense wrote:
Sat Sep 09, 2017 1:53 pm
And here it is from the Irish government...
Thanks for the update.

To sum up, non-UK and non-Irish investors suffer no UK or Irish dividend taxes, estate taxes, inheritance taxes, gift taxes, transfer taxes, capital acquisition taxes, capital gains taxes, or stamp duty reserve taxes(*) when buying, holding, dying while holding(!), or selling Ireland domiciled ETFs(**) on the London stock exchange.

(*) Did I miss any possible taxes out? Governments in general are really good at inventing new ones. You only have to look away for a second for another to appear from nowhere.

(**) Typically, although not exclusively, Vanguard EU or iShares EU products.

Hortense
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hortense » Sat Sep 09, 2017 2:41 pm

Sounds about right, unless you consider the taxes their home country imposes on them, of course. I didn't know about the SDRT exemption. Too bad I'm not the ETF type. But it's good to learn.

Always passive
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Always passive » Tue Oct 10, 2017 11:54 pm

A slightly different question:
Are there any transaction taxes, like Stamp Tax, when trading ETFs (in this case Irish ones) in the Swiss or London Stock Exchanges? A family member bought IUAA, the US Aggregate Bond ETF through the Swiss Exchange and HSBC shows price = $5.0823; however the transaction was booked at $5.09553. Let me mentioned that the account with HSBC is a flat total fee account (no per transaction broker fee)


Hortense
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hortense » Wed Oct 11, 2017 3:15 pm

Always passive wrote:
Tue Oct 10, 2017 11:54 pm
A slightly different question:
Are there any transaction taxes, like Stamp Tax, when trading ETFs (in this case Irish ones) in the Swiss or London Stock Exchanges? A family member bought IUAA, the US Aggregate Bond ETF through the Swiss Exchange and HSBC shows price = $5.0823; however the transaction was booked at $5.09553. Let me mentioned that the account with HSBC is a flat total fee account (no per transaction broker fee)
I don't know anything about the Swiss exchange. The internet tells me that the UK removed stamp duty on non-UK domiciled funds in 2007 [1,2] and on UK-domiciled ETFs on 2014.

There's also an Irish stamp duty, but it's not levied on Irish-domiciled ETFs, as noted above.

[1] - http://www.economist.com/node/9210577
[2] - https://www.lseg.com/areas-expertise/ou ... ducts/etfs

Hortense
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hortense » Wed Oct 11, 2017 3:21 pm

Swiss stamp duties are levied on each purchase and sale of shares, bonds, structured products, investment funds, ETFs and other securities.

...

Stamp duties on Swiss shares (Swiss ISIN): 0.075%
Stamp duties on foreign shares (non-Swiss ISIN): 0.15%
source: https://www.moneyland.ch/en/swiss-stamp ... definition

Always passive
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Always passive » Fri Oct 13, 2017 8:19 am

Hortense wrote:
Wed Oct 11, 2017 3:21 pm
Swiss stamp duties are levied on each purchase and sale of shares, bonds, structured products, investment funds, ETFs and other securities.

...

Stamp duties on Swiss shares (Swiss ISIN): 0.075%
Stamp duties on foreign shares (non-Swiss ISIN): 0.15%
source: https://www.moneyland.ch/en/swiss-stamp ... definition

HSBC not only charged the 0.15% stap tax (they say that all Swiss banks are obligated to charge it) but also added what they called “external fees”. What is the meaning of external fees is a big unknown to me since the account is all fee included/flat 0.2% annual.

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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Valuethinker » Sat Oct 14, 2017 6:29 am

Hyperborea wrote:
Wed Jun 14, 2017 1:32 am
TedSwippet wrote:Are you moving to the UK (or another country with equivalent US income tax and US estate tax treaties)? If yes, you could also use US domiciled ETFs without issues, since the UK/US tax treaties provide you with comparable US tax rates on dividends and decent insulation from US estate taxes. This isn't the case for the OP -- Singapore has no tax treaties with the US.
I'll be spending 2-5 years in Japan and then probably (though fuzzier since it's further away) a fair bit of time based in Portugal. Neither of which has a newer style estate tax treaty with the US. Also, I can avoid paying taxes on earnings kept outside of Japan for up to 5 years which is the max I'll be staying. Portugal allows certain kinds of earnings to be tax free in Portugal for up to 10 years (non-habitual resident). Given that I don't want to be paying US tax that I don't have to nor be potentially subject to US estate tax (or have my wife in that situation).

The current Irish domiciled ETFs sold on the LSE fits the bill perfectly but I've been a bit worried that the May-bot may bodge that up.
If you are an American citizen this strategy won't work?

The reason being PFIC rules-- the IRS will tax you on foreign funds in the worst possible way. And America taxes by citizenship, not country of residence.

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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Always passive » Sat Oct 14, 2017 6:45 am

Valuethinker wrote:
Sat Oct 14, 2017 6:29 am
Hyperborea wrote:
Wed Jun 14, 2017 1:32 am
TedSwippet wrote:Are you moving to the UK (or another country with equivalent US income tax and US estate tax treaties)? If yes, you could also use US domiciled ETFs without issues, since the UK/US tax treaties provide you with comparable US tax rates on dividends and decent insulation from US estate taxes. This isn't the case for the OP -- Singapore has no tax treaties with the US.
I'll be spending 2-5 years in Japan and then probably (though fuzzier since it's further away) a fair bit of time based in Portugal. Neither of which has a newer style estate tax treaty with the US. Also, I can avoid paying taxes on earnings kept outside of Japan for up to 5 years which is the max I'll be staying. Portugal allows certain kinds of earnings to be tax free in Portugal for up to 10 years (non-habitual resident). Given that I don't want to be paying US tax that I don't have to nor be potentially subject to US estate tax (or have my wife in that situation).

The current Irish domiciled ETFs sold on the LSE fits the bill perfectly but I've been a bit worried that the May-bot may bodge that up.
If you are an American citizen this strategy won't work?

The reason being PFIC rules-- the IRS will tax you on foreign funds in the worst possible way. And America taxes by citizenship, not country of residence.
Thank you for your warning, which I was fully aware. The account belongs to a non US relative. I am a US citizen living offshore investing only in US based ETFs.

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Hyperborea
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Re: Tax implications of investing through London Stock Exchange for non-resident investors

Post by Hyperborea » Sat Oct 14, 2017 10:43 am

Valuethinker wrote:
Sat Oct 14, 2017 6:29 am
Hyperborea wrote:
Wed Jun 14, 2017 1:32 am
TedSwippet wrote:Are you moving to the UK (or another country with equivalent US income tax and US estate tax treaties)? If yes, you could also use US domiciled ETFs without issues, since the UK/US tax treaties provide you with comparable US tax rates on dividends and decent insulation from US estate taxes. This isn't the case for the OP -- Singapore has no tax treaties with the US.
I'll be spending 2-5 years in Japan and then probably (though fuzzier since it's further away) a fair bit of time based in Portugal. Neither of which has a newer style estate tax treaty with the US. Also, I can avoid paying taxes on earnings kept outside of Japan for up to 5 years which is the max I'll be staying. Portugal allows certain kinds of earnings to be tax free in Portugal for up to 10 years (non-habitual resident). Given that I don't want to be paying US tax that I don't have to nor be potentially subject to US estate tax (or have my wife in that situation).

The current Irish domiciled ETFs sold on the LSE fits the bill perfectly but I've been a bit worried that the May-bot may bodge that up.
If you are an American citizen this strategy won't work?

The reason being PFIC rules-- the IRS will tax you on foreign funds in the worst possible way. And America taxes by citizenship, not country of residence.
Correct, if one is a US citizen then this won't work. I am a green card holder and it won't work for one of those either until you give up the green card. There is a correct set of dance steps to make the move work correctly. There are scenarios where one can be considered to have given up the greencard by USCIS but not by the IRS. I will be expatriating and turning in the green card at the correct time after I arrive in Japan. After that I will move my investments into Irish domiciled ETFs sold on the LSE. I won't be holding these while I am a US tax resident.

The main point of doing this is to avoid the punitive US estate taxes levied against a non-resident alien. There is a meagre $40K exemption before the amount rises very quickly to 40% on all US situs property (property in the US - real estate, stock sold on the US exchanges, cash in a brokerage account or in a safe deposit but oddly not cash held in a bank account, etc.). Once I'm a non-US resident it makes no sense to hold US funds, ETFs, or stock - US tax law seems designed to force non-resident aliens to not directly own these.

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