Belgian citizen/UK resident seeking advice on 1st portfolio

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Topic Author
AlyUK
Posts: 4
Joined: Mon Mar 23, 2020 7:26 am

Belgian citizen/UK resident seeking advice on 1st portfolio

Post by AlyUK » Mon Mar 23, 2020 7:58 am

Hi all,

Have been considering going into investing for a year or two but was always confused on how to go about it as someone who moves a lot. My situation has somewhat stabilised so thought I would get started on it as I'm turning 30 this year.

Have been reading up about investing and have a basic level of understanding on how it all works, but am no expert.

Resident: live in UK, but am Belgian citizen
International lifestyle: living in UK for the foreseeable future and work seasonal jobs for UK companies in Europe. Possible move to Canada in 5 - 10 years.
Currency: GBP
Emergency funds: hard to say because my living expenses (rent) is either free or negligible. Am in good situation but do have a few grand in the bank
Debt: None
Age: Turning 30
Desired asset allocation: Probably 80/20
Portfolio: low to mid four figures

I'm someone who likes to travel and I do so by working seasonally, living frugally and traveling frugally during low season. I worked my way to a high 5 figure before in a minimum wage job so am confident I can start putting money aside for investing.

Am not doing it to become rich but to have a comfy safety net when I'm older. When I get more comfortable in the investing world, I might create a separate strategy to accumulate money for the next 5 -15 years. But currently in it for the long haul.

As a new investor, I'd like to start with a small lump sum and then DCA for the next year. After this, maybe I'll switch to a different strategy.

Would like some feedback on which funds to invest in, and some additional info on whether or not to invest in bonds.

In Belgium, there's a 30% tax on (accumulating) bonds but as I'm not residing in Belgium, I'm not sure if that applies to me. I've tried to find info about it online but came up empty.

As for funds, I've gathered this info from the bogleheads wiki:

1) Vanguard FTSE UK ALL Share index Unit Trust
2) Vanguard FTSE ALL world ETF (GBP) VWRL
(Though I did see on another thread that the UCITS ETF might be better.)
3) Vanguard UK Gov. Bond ETF VGOV

Any suggestions on better funds is appreciated. Lots of people talking about iShares but not sure if that's the right move for me.

Last not but least, I'm considering going with Degiro. If anyone has any better suggestions or considerations for me to take into account, would appreciate it.

Thank you.

Dion
Posts: 3
Joined: Mon Mar 23, 2020 8:21 pm

Re: Belgian citizen/UK resident seeking advice on 1st portfolio

Post by Dion » Mon Mar 23, 2020 8:29 pm

Hi AlyUK,

I just became member of this forum, because i'm in quite the same boat as you. Also an expat, but i'm from the Netherlands. I'm also looking to build my portfolio with certain ETFs. I would love to get in touch with you to pick each others brain. Please let me know if we can do a call or something. I just figured out i can't PM you.

In the mean time, I will also be reading this thread :D

User avatar
BeBH65
Posts: 1634
Joined: Sat Jul 04, 2015 7:28 am

Re: Belgian citizen/UK resident seeking advice on 1st portfolio

Post by BeBH65 » Tue Mar 24, 2020 2:15 am

AlyUK wrote:
Mon Mar 23, 2020 7:58 am
Hi all,

Have been considering going into investing for a year or two but was always confused on how to go about it as someone who moves a lot. My situation has somewhat stabilised so thought I would get started on it as I'm turning 30 this year.

Have been reading up about investing and have a basic level of understanding on how it all works, but am no expert.

Resident: live in UK, but am Belgian citizen
International lifestyle: living in UK for the foreseeable future and work seasonal jobs for UK companies in Europe. Possible move to Canada in 5 - 10 years.
Currency: GBP
Emergency funds: hard to say because my living expenses (rent) is either free or negligible. Am in good situation but do have a few grand in the bank >>> explain that to us! why is it free? can this ever fall away? Make sure that you have an emergency fund from which you can live for several months without recieving anything from anybody.
Debt: None
Age: Turning 30
Desired asset allocation: Probably 80/20
Portfolio: low to mid four figures

I'm someone who likes to travel and I do so by working seasonally, living frugally and traveling frugally during low season. I worked my way to a high 5 figure before in a minimum wage job so am confident I can start putting money aside for investing.

Am not doing it to become rich but to have a comfy safety net when I'm older. When I get more comfortable in the investing world, I might create a separate strategy to accumulate money for the next 5 -15 years. But currently in it for the long haul.

As a new investor, I'd like to start with a small lump sum and then DCA for the next year. After this, maybe I'll switch to a different strategy.

Would like some feedback on which funds to invest in, and some additional info on whether or not to invest in bonds.

In Belgium, there's a 30% tax on (accumulating) bonds but as I'm not residing in Belgium, I'm not sure if that applies to me. I've tried to find info about it online but came up empty.If you cut your ties with Belgium you will ony have to pay UK tax, if ties are not cut it might be that you have to pay taxes twice.

As for funds, I've gathered this info from the bogleheads wiki:

1) Vanguard FTSE UK ALL Share index Unit Trust
2) Vanguard FTSE ALL world ETF (GBP) VWRL
(Though I did see on another thread that the UCITS ETF might be better.)this is an UCITS ETF
3) Vanguard UK Gov. Bond ETF VGOV

Any suggestions on better funds is appreciated. Lots of people talking about iShares but not sure if that's the right move for me.

Last not but least, I'm considering going with Degiro. If anyone has any better suggestions or considerations for me to take into account, would appreciate it.

Thank you.

Start reading here: https://www.bogleheads.org/wiki/Boglehe ... _investors
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles

Topic Author
AlyUK
Posts: 4
Joined: Mon Mar 23, 2020 7:26 am

Re: Belgian citizen/UK resident seeking advice on 1st portfolio

Post by AlyUK » Tue Mar 24, 2020 2:37 am

BeBH65 wrote:
Tue Mar 24, 2020 2:15 am
AlyUK wrote:
Mon Mar 23, 2020 7:58 am

Emergency funds: hard to say because my living expenses (rent) is either free or negligible. Am in good situation but do have a few grand in the bank >>> explain that to us! why is it free? can this ever fall away? Make sure that you have an emergency fund from which you can live for several months without recieving anything from anybody.

As stated, I do have emergency funds but people count it in months, which is hard for me to do. I work seasonally and in winter, it's all inclusive (ergo free), in summer I pay £40 on rent a week. Both are fixed deals.


In Belgium, there's a 30% tax on (accumulating) bonds but as I'm not residing in Belgium, I'm not sure if that applies to me. I've tried to find info about it online but came up empty.If you cut your ties with Belgium you will ony have to pay UK tax, if ties are not cut it might be that you have to pay taxes twice.

"Cut ties" is very vague. I'm not "registered" in my town anymore but have a passport obviously, but no bank accounts, etc. Still unsure if that counts as ties cut considering I have to put down my parents address for anything legal I need doing (like replacing drivers license)

As for funds, I've gathered this info from the bogleheads wiki:

1) Vanguard FTSE UK ALL Share index Unit Trust
2) Vanguard FTSE ALL world ETF (GBP) VWRL
(Though I did see on another thread that the UCITS ETF might be better.)this is an UCITS ETF
There's a thread where all words VWRL and UCITS ETF are being discussed as two separate funds.
3) Vanguard UK Gov. Bond ETF VGOV

Any suggestions on better funds is appreciated. Lots of people talking about iShares but not sure if that's the right move for me.

Last not but least, I'm considering going with Degiro. If anyone has any better suggestions or considerations for me to take into account, would appreciate it.

Thank you.

Start reading here: https://www.bogleheads.org/wiki/Boglehe ... _investors
I have read this before.

TedSwippet
Posts: 2822
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Belgian citizen/UK resident seeking advice on 1st portfolio

Post by TedSwippet » Tue Mar 24, 2020 4:05 am

Welcome.
AlyUK wrote:
Mon Mar 23, 2020 7:58 am
In Belgium, there's a 30% tax on (accumulating) bonds but as I'm not residing in Belgium, I'm not sure if that applies to me. I've tried to find info about it online but came up empty.
Belgium won't tax if you are genuinely not resident there, and from what you wrote, it sounds like you are not. Only the US and Eritrea tax their citizens living abroad. So for now you don't need to worry about Belgian tax on your income or investments.

What you might want to consider though, when setting things up, is how Belgium would tax your holdings and accounts if you move back there. You also need to research how Canada would tax your accounts if you move there. Some of the answers will be in the UK/Belgium and UK/Canada tax treaties, and some in these countries' own domestic tax rules. My guess would be that neither will recognise an ISA, both might be okay with a SIPP or other pension, and Canada might perhaps be more problematic with UCITS ETFs than Belgium, where these should be fine. These are speculations, though, so check the details for yourself.
AlyUK wrote:
Mon Mar 23, 2020 7:58 am
As for funds, I've gathered this info from the bogleheads wiki:

1) Vanguard FTSE UK ALL Share index Unit Trust
2) Vanguard FTSE ALL world ETF (GBP) VWRL
(Though I did see on another thread that the UCITS ETF might be better.)
3) Vanguard UK Gov. Bond ETF VGOV

Any suggestions on better funds is appreciated. Lots of people talking about iShares but not sure if that's the right move for me.
1 and 2 overlap (so far at least, the UK is still part of the world!). Unless you want to take a punt on overweighting UK stocks, I think you'd be better off with just VWRL or equivalent for stocks, particularly as someone with an international lifestyle both now and perhaps in future. As for bonds, probably something more global there too as a hedge against moving out of the UK in future.

Should you hold bonds at all? At your age, many folk say no. Given what's going on now ... shrug. Nobody can really tell you, so you either go by past rules of thumb and market history, which might or might not be prelude to the future, or take a position that you are sure you can live with.

iShares is just an alternative to Vanguard, so if iShares ETFs meet your needs better than Vanguard ones then use them. Blackrock is a solid and trusted provider, and some of their offerings have lower TERs than their Vanguard equivalents. Searching the wiki and the forum should throw up lots of ideas and threads from others on which iShares ETFs are preferred when considering alternatives to Vanguard.

Finally, as a UK resident you should probably prioritise ISAs. These shelter you from UK tax, but probably won't from any other country's tax when you move. At least you'll have the benefit of tax-freeness while still in the UK, though. If/when you leave, and assuming an ISA will be a tax hassle where you are going, you can simply cash it in and buy equivalents in your new country.

Topic Author
AlyUK
Posts: 4
Joined: Mon Mar 23, 2020 7:26 am

Re: Belgian citizen/UK resident seeking advice on 1st portfolio

Post by AlyUK » Tue Mar 24, 2020 6:51 am

TedSwippet wrote:
Tue Mar 24, 2020 4:05 am
Welcome.
AlyUK wrote:
Mon Mar 23, 2020 7:58 am

What you might want to consider though, when setting things up, is how Belgium would tax your holdings and accounts if you move back there. You also need to research how Canada would tax your accounts if you move there. Some of the answers will be in the UK/Belgium and UK/Canada tax treaties, and some in these countries' own domestic tax rules. My guess would be that neither will recognise an ISA, both might be okay with a SIPP or other pension, and Canada might perhaps be more problematic with UCITS ETFs than Belgium, where these should be fine. These are speculations, though, so check the details for yourself.

Don't intend to move back to Belgium. Will definitely look into the UK/Canada tax treaties as ideally, I'd like to end up living there.
AlyUK wrote:
Mon Mar 23, 2020 7:58 am
As for funds, I've gathered this info from the bogleheads wiki:

1) Vanguard FTSE UK ALL Share index Unit Trust
2) Vanguard FTSE ALL world ETF (GBP) VWRL
(Though I did see on another thread that the UCITS ETF might be better.)
3) Vanguard UK Gov. Bond ETF VGOV

Any suggestions on better funds is appreciated. Lots of people talking about iShares but not sure if that's the right move for me.
1 and 2 overlap (so far at least, the UK is still part of the world!). Unless you want to take a punt on overweighting UK stocks, I think you'd be better off with just VWRL or equivalent for stocks, particularly as someone with an international lifestyle both now and perhaps in future. As for bonds, probably something more global there too as a hedge against moving out of the UK in future.

I was worried they might overlap, forgot to add that to the original post. As for bonds, I probably will hold some and will definitely consider going global.

iShares is just an alternative to Vanguard, so if iShares ETFs meet your needs better than Vanguard ones then use them. Blackrock is a solid and trusted provider, and some of their offerings have lower TERs than their Vanguard equivalents. Searching the wiki and the forum should throw up lots of ideas and threads from others on which iShares ETFs are preferred when considering alternatives to Vanguard.

Finally, as a UK resident you should probably prioritise ISAs. These shelter you from UK tax, but probably won't from any other country's tax when you move. At least you'll have the benefit of tax-freeness while still in the UK, though. If/when you leave, and assuming an ISA will be a tax hassle where you are going, you can simply cash it in and buy equivalents in your new country.

I do have an ISA actually, but thought I'd like to widen my investment net so to speak.
Thank you very much for your help. You've given me some good things to consider and things I need to research further. UK lockdown day one: Yoga, run and researching stocks and bonds!

Valuethinker
Posts: 39959
Joined: Fri May 11, 2007 11:07 am

Re: Belgian citizen/UK resident seeking advice on 1st portfolio

Post by Valuethinker » Tue Mar 24, 2020 1:12 pm

AlyUK wrote:
Mon Mar 23, 2020 7:58 am
Hi all,

Have been considering going into investing for a year or two but was always confused on how to go about it as someone who moves a lot. My situation has somewhat stabilised so thought I would get started on it as I'm turning 30 this year.

Have been reading up about investing and have a basic level of understanding on how it all works, but am no expert.

Resident: live in UK, but am Belgian citizen
International lifestyle: living in UK for the foreseeable future and work seasonal jobs for UK companies in Europe. Possible move to Canada in 5 - 10 years.
Currency: GBP
Emergency funds: hard to say because my living expenses (rent) is either free or negligible. Am in good situation but do have a few grand in the bank
Debt: None
Age: Turning 30
Desired asset allocation: Probably 80/20
Portfolio: low to mid four figures

I'm someone who likes to travel and I do so by working seasonally, living frugally and traveling frugally during low season. I worked my way to a high 5 figure before in a minimum wage job so am confident I can start putting money aside for investing.

Am not doing it to become rich but to have a comfy safety net when I'm older. When I get more comfortable in the investing world, I might create a separate strategy to accumulate money for the next 5 -15 years. But currently in it for the long haul.

As a new investor, I'd like to start with a small lump sum and then DCA for the next year. After this, maybe I'll switch to a different strategy.

Would like some feedback on which funds to invest in, and some additional info on whether or not to invest in bonds.

In Belgium, there's a 30% tax on (accumulating) bonds but as I'm not residing in Belgium, I'm not sure if that applies to me. I've tried to find info about it online but came up empty.

As for funds, I've gathered this info from the bogleheads wiki:

1) Vanguard FTSE UK ALL Share index Unit Trust
2) Vanguard FTSE ALL world ETF (GBP) VWRL
(Though I did see on another thread that the UCITS ETF might be better.)
3) Vanguard UK Gov. Bond ETF VGOV

Any suggestions on better funds is appreciated. Lots of people talking about iShares but not sure if that's the right move for me.

Last not but least, I'm considering going with Degiro. If anyone has any better suggestions or considerations for me to take into account, would appreciate it.

Thank you.
Re Canada

There is the Canadian Financial Wisdom Forum linked from here. You might want to investigate:

- Canadian taxation is pretty grievous. You will find your UK ISAs don't work in Canada, so you would have to cash them in (I am not sure of this, but this is my understanding). Any assets outside ISAs, etc. you probably need to sell (and repurchase) to establish a new cost base for Canadian capital gains. I suspect the taxation position for foreign funds held in Canada is pretty grievous so you will have to rebuild the positions using Canadian or US-listed ETFs and mutual funds.

Not sure how personal pensions work in that context if you move to Canada.

There is a problem with the indexation of UK state pension when you move to Canada or Australia. (but not USA, not clear what the position is w EU post Brexit transition). In that it is not inflation indexed - fixed at your time of departure. Down the decades, with 2-3% inflation (and UK state pension is currently indexed to 2.5% real increase) and given you might have a spouse who outlives you, this can actually matter. There is no sign the government will budge on this one even though Australia and Canada (and Spain) are the leading countries of retirement of Brits (maybe that is the reason).

- Canada does immigration on a points system. I don't have a need to test it, but my understanding is that, like Australia, age counts against you. After age 45 pretty much forget it, even in a highly valued profession (such as nurse, machine toolist etc.) - that's certainly true of Australia.

So if you want to emigrate to Canada you want to think about it sooner rather than later.

I have my own views of Canadian housing markets (ridiculously overvalued - Toronto and Vancouver, anyways).

- if you are of a professional group like doctor or lawyer, regulation is pretty much at the Provincial level, and the local professional association basically forces you to redo your entire training - 5 years of Canadian medical school etc. There are plenty of doctors (in their own countries) driving taxis in Toronto etc.

Topic Author
AlyUK
Posts: 4
Joined: Mon Mar 23, 2020 7:26 am

Re: Belgian citizen/UK resident seeking advice on 1st portfolio

Post by AlyUK » Wed Mar 25, 2020 2:46 am

Valuethinker wrote:
Tue Mar 24, 2020 1:12 pm
AlyUK wrote:
Mon Mar 23, 2020 7:58 am


- Canadian taxation is pretty grievous. You will find your UK ISAs don't work in Canada, so you would have to cash them in (I am not sure of this, but this is my understanding). Any assets outside ISAs, etc. you probably need to sell (and repurchase) to establish a new cost base for Canadian capital gains. I suspect the taxation position for foreign funds held in Canada is pretty grievous so you will have to rebuild the positions using Canadian or US-listed ETFs and mutual funds.

Not sure how personal pensions work in that context if you move to Canada.

There is a problem with the indexation of UK state pension when you move to Canada or Australia. (but not USA, not clear what the position is w EU post Brexit transition). In that it is not inflation indexed - fixed at your time of departure. Down the decades, with 2-3% inflation (and UK state pension is currently indexed to 2.5% real increase) and given you might have a spouse who outlives you, this can actually matter. There is no sign the government will budge on this one even though Australia and Canada (and Spain) are the leading countries of retirement of Brits (maybe that is the reason).

- Canada does immigration on a points system. I don't have a need to test it, but my understanding is that, like Australia, age counts against you. After age 45 pretty much forget it, even in a highly valued profession (such as nurse, machine toolist etc.) - that's certainly true of Australia.

So if you want to emigrate to Canada you want to think about it sooner rather than later.

I have my own views of Canadian housing markets (ridiculously overvalued - Toronto and Vancouver, anyways).

- if you are of a professional group like doctor or lawyer, regulation is pretty much at the Provincial level, and the local professional association basically forces you to redo your entire training - 5 years of Canadian medical school etc. There are plenty of doctors (in their own countries) driving taxis in Toronto etc.
Thanks for all the advice. In regards to immigrating to Canada, I'm well aware of the points system. Was there back in 2012-2013, have been trying to find a way back in ever since. I know that age will work against me but I don't have the funds yet, nor the desire to settle down to make the move. But it's a possibility it might happen in the next five years, if I can make it work.

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