Capital Gains Tax

mervuedude

I got involved with buying shares for the first time this year. I know I could've invested in the Irish market but all the info I get comes from the States, I wouldn't go near our market with a barge pole. Now I was well aware that I'd have to pay cgt of 25% on any profit I make but this takes the biscuit. I bought shares in an American Natural Gas company during the summer. I got a dividend of $890 a few months later, happy days. However, the US taxman took 35% in CGT and after currency exchange I ended up with around €400. What I didn't know (until today) is that I now have to pay our taxman a further 25% CGT on the dividend. That's a total of 60%, unbelieveable. I do all the work, take all the risk and invest my hard earned cash. Then the taxman comes along and says "well done that man, now hand over your winnings". It's' highway robbery, pure and simple, 60 bloody per cent. Well I can tell you it's my last venture into the stock market. I'll not subsidise our welfare state anymore.

dblennon

There a couple of things to mention there.

firstly If you deal with a broker who is not a QI with the IRS you will be charged 30% DWT on income you also at the time you setup the account needed to declare that you were not a US citizen.

secondly the Irish Encashment tax charge on all foreign income is 20%, this can be reclaimed in certain situations but I don't know how you go about it.

It is not regarded as CGT which is only liable when you sell the shares.

the best way to avoid the 20% hit is to either put the stock in your pension or setup a Limited company which specifically deals in equities etc. that way the dividends will be paid without the 20% encsh. tax.

you should talk to your broker about the 30% DWT you may need to provide them with specific Identification docs to get it reduced to 15%

soddy1979

First things first - pretty sure you mean WHT(DWT) & not CGT.

Secondly, if you're investing in a foreign market do your homework on tax. Especially if your investing enough to get a $890 dividend.

Anyway, hopefully some capital appreciation will help you get over your WHT issue!

mervuedude

Thanks for the replies lads, something for me to work on. I use NIB as my broker, tried talking to the trading office but they couldn't help. I'll talk to someone on the Financial side and see what they recommend.