etfs and dividends

heno55

Hi all i am currently looking into buying etfs listed on the irish stock exchange but apart from the iseq etf all the rest seem to pay no dividends, they all state that DIVIDENDS ARE CAPITALISED, am i right in assuming that this means the dividends are put back into the fund to increase growth.

On a compleatly different track can i use the cost of nationalised anglo shares as a loss when calculating cgt,
thanks in advance for any replies

smallcapmac

Hi heno55, capitalised dividends are exactly as you say, they are reinvested back into the fund for you. If you are not to bothered about getting an income in the short term I would consider this a big advantage. You get to reinvest at a very low cost and also dont have to pay the income tax on the dividents (better confirm this with the tax man;)).
ETFs seems a very good way to invest and diversify in one trade but I would stay away from the ISEQ20 ETF its too concentrated. why not just go by a couple of CRH and ryaniar shares and then put the rest of your money on a horse to replicate the return of the bank shares?!
Also get your broker to order through the london stock exchange as the selection of efts there is massive. Check out the ishares or dbx sites to narrow down the selection. The etfs listed on the ISE are only getting going and dont seem to have good liquidity yet

On your anglo shares....good question I have no idea but I understand the government are supposed to be geeting an independent valuer to see what the shareholders will get (btw it will be zero) and until this is confirmed it will be difficult to write it off in the eyes of tax man. worth dropping the revenue an email about it. let us know what the story is.

P.S. you actually have some capital gains in 2008?!!!!!! I'm impressed

heno55

thanks for the reply, i will certanley check out the etfs on the london exchange,
as for putting money on a horse i have allready done that a few times this year just the two horses over and over again, they are called AIB and BOI hence the capital gains, now that i have actually made some money i suddenly dont feel like gambling with it anymore, after reading a lot of the advice/opinions posted here it seems the safest way to go for a novice.(ETFS)

jamesonandcoke

Re your loss in respect of Anglo Shares, The Revenue Commissioners publised an e brief on this and they concluded that a negligible loss claim under Section 538 TCA 1997 can be made in respect of the shares.

You might have a look for it on Revenue website www.revenue.ie