Advice Required: Brit investing in ETFs from Singapore

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Topic Author
Brit_Abroad
Posts: 6
Joined: Sat Jan 08, 2022 8:18 am

Advice Required: Brit investing in ETFs from Singapore

Post by Brit_Abroad »

Hi All,

I am looking for some advice on my proposed ETF portfolio.

I have searched the forum already and found 3 relevant threads from 2018, 2019 and 2020. I have followed up on some of that advice... but just in case the world has changed, I would like to pose the question again.

Background:
Nationality: British Citizen
Resident: Singapore (on an EP as a Foreigner)
Age: 40
Next Move: Don't know where, don't know when, but possibilities with work include Australia, Malaysia, UK.
Available Funds: SGD40k, GBP10k, propose save c.SGD2k per month
Brokerage: Saxo

From what I have read this is what I understand:
1. Should be Ireland domiciled ETF for tax reasons
2. Fund currency in GBP or USD is not critical
3. Accumulating requires less input, but Distributing will be easier for traceability when/if returning to the UK (although could sell ETF and re-buy prior to returning to UK).
4. Looking for low TER.
5. Should have at least 20% Bonds (maybe even 40% at my age).
6. Should have global exposure.

If I could, I would just by Vanguard LifeStrategy 80% Equity Fund.... but as I am not resident in the UK, I cannot. I did see one proposal of someone trying to replicate one of these funds, but I am too much of a newbie right now to attempt that. So my initial proposal would be to have max 3 funds, preferably 2.

From my research I looked at these ETFs. Most of the iShares appear to be unavailable to me via Saxo. The ETFs I am interested in, I have highlighted in green.
Image

Several portfolios have been proposed by others, summarised in the table below. The 3 options I am currently considering starting with are shown at the bottom of the table.
Image

Any thoughts? Considerations that I have missed? Advice?


Cheers!!
TedSwippet
Posts: 4037
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Advice Required: Brit investing in ETFs from Singapore

Post by TedSwippet »

Brit_Abroad wrote: Fri Jan 14, 2022 9:30 am If I could, I would just by Vanguard LifeStrategy 80% Equity Fund.... but as I am not resident in the UK, I cannot.
It only trades in EUR, so perhaps misses on your USD/GBP criterion, but might one of Vanguard's LifeStrategy ETFs fit the bill? For example, V80D or it's accumulating equivalent V80A.

Otherwise, the wiki contains several sample portfolios for you to compare with your current candidates. Maybe start here:

Simple non-US portfolios - Bogleheads
Topic Author
Brit_Abroad
Posts: 6
Joined: Sat Jan 08, 2022 8:18 am

Re: Advice Required: Brit investing in ETFs from Singapore

Post by Brit_Abroad »

Oh wow, thanks TedSwippet. Very interesting. I see V80D and V80A are both domiciled in Ireland. Would buying on xmil or xams introduce any tax issues for me? Or is the key thing for any product I buy to be domiciled in Ireland?

The sample portfolio link looks good.... I read it now.
TedSwippet
Posts: 4037
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Advice Required: Brit investing in ETFs from Singapore

Post by TedSwippet »

Brit_Abroad wrote: Sat Jan 15, 2022 12:15 am Would buying on xmil or xams introduce any tax issues for me?
It shouldn't. What matters is what you hold, not where or how you hold it. Just avoid anything and everything that is US domiciled and you ought to be fine.
Valuethinker
Posts: 43580
Joined: Fri May 11, 2007 11:07 am

Re: Advice Required: Brit investing in ETFs from Singapore

Post by Valuethinker »

TedSwippet wrote: Sat Jan 15, 2022 3:00 am
Brit_Abroad wrote: Sat Jan 15, 2022 12:15 am Would buying on xmil or xams introduce any tax issues for me?
It shouldn't. What matters is what you hold, not where or how you hold it. Just avoid anything and everything that is US domiciled and you ought to be fine.
You mean avoid US in favour of Irish-domiciled funds?

I don't know what the tax position of non Irish (or Guernsey/ Jersey/ IOM & Luxembourg domiciled) funds would be for a UK taxpayer (if OP returned to UK) but I imagine it would be grievous? Certainly it was for Canadian funds.
TedSwippet
Posts: 4037
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Advice Required: Brit investing in ETFs from Singapore

Post by TedSwippet »

Valuethinker wrote: Sat Jan 15, 2022 11:35 am
TedSwippet wrote: Sat Jan 15, 2022 3:00 am
Brit_Abroad wrote: Sat Jan 15, 2022 12:15 am Would buying on xmil or xams introduce any tax issues for me?
It shouldn't. What matters is what you hold, not where or how you hold it. Just avoid anything and everything that is US domiciled and you ought to be fine.
You mean avoid US in favour of Irish-domiciled funds?
The aim is for a Singaporean investor to avoid egregious and entirely unnecessary US tax, both dividend withholding tax and estate tax. So in that respect, any non-US domiciled fund will avoid US tax overlay baggage and so would be preferable to a US domiciled one.

It is immaterial which exchange non-US domiciled ETFs are bought/held on. Also, mostly immaterial through which broker (the lobster trap here being the US's trick of making a cash holding in a US broker subject to US estate taxes).
Valuethinker wrote: Sat Jan 15, 2022 11:35 am I don't know what the tax position of non Irish (or Guernsey/ Jersey/ IOM & Luxembourg domiciled) funds would be for a UK taxpayer (if OP returned to UK) but I imagine it would be grievous? Certainly it was for Canadian funds.
Luxembourg domiciled funds would be fine, since they are UCITS. Same as Ireland from the UK perspective, then.

I can't find any Guernsey or IOM domiciled funds -- that is, on a cursory look; JustETF doesn't list any -- but there are some Jersey domiciled ones. Funds domiciled in Jersey are not UCITS, so here one would need to consult HMRC's unwieldy list of funds with reporting status, to see whether they would be treated as normal, or get the special capital-gains-taxed-at-income-tax-rates treatment (the UK's comparatively mild analogue to the US's appalling PFIC tax rule).

From the look of things, all these Jersey domiciled funds are ETCs tracking rare metals. The gold and silver ones might conceivably have a place in a boglehead portfolio, but palladium and rhodium not so much.
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