Sell VTI and Buy VWRA or VUAA? (Taiwanese Investing in Singapore)

[hkung]

Hi everyone,

I am a Taiwanese citizen who has been living in the US as a resident alien without a green card. I plan to relocate to Singapore for work and might not return to the US anytime soon.

I have a taxable account with Vanguard and hold 100% VTI. Although Vanguard will allow me to maintain my account after I leave the US, I will pay 30% on dividends and potential estate tax to the US once I become a nonresident alien.

Therefore, to reduce the dividend withholding tax and avoid estate tax, I consider selling my shares in VTI and buying Ireland-domiciled ETFs after leaving the US. I am considering VWRA or VUAA specifically. Although VWRA is more diversified, it has a higher expense ratio. Instead, I tend to favor VUAA because it has a lower expense ratio and consists of large US companies that also have extensive international operations. (Please let me know if I am missing something here.)

If this plan sounds good, because capital gains from US-domiciled ETFs are not taxable for a nonresident alien, is it a good idea that I sell all my VTI in one lump sum when I become a nonresident alien?

I appreciate your opinions.

[TedSwippet]

Welcome.

If this plan sounds good, because capital gains from US-domiciled ETFs are not taxable for a nonresident alien, is it a good idea that I sell all my VTI in one lump sum when I become a nonresident alien?

It is definitely a good idea. Singapore does not tax capital gains, and by switching to an equivalent non-US domiciled ETF you then avoid unpleasant and potentially confiscatory US taxes in future. Be sure to disconnect properly from the IRS when you leave the US. The wiki contains a small section on this:

US tax pitfalls for a non-US person moving to the US - Permanently leaving the US

[glorat]

For similar reasons, I once sold all my VTI and replaced with VWRL (and would have used VWRA if it existed at the time)

Therefore I support

[hkung]

Thank you Ted and glorat, for making this clear to me! The Wiki page is helpful!