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Taxation of ETFs

  • 23-03-2017 9:37am
    #1
    candlegrease
    Registered Users, Registered Users 2 Posts: 475 ✭✭


    Apparently UCITS ETFs subject to 41% CGT and also 8 years taxation even when not sold.

    I am not currently resident in Ireland but do hold UCITS ETF.

    If I am to return to Ireland at what stage will these taxation rules apply? Should I sell before becoming tax resident in Ireland? Is it possible to return to Ireland and leave again before the 8 years are up in order to avoid dividend taxation?

    It seems complicated


Comments

  • #2
    scheister
    Registered Users, Registered Users 2 Posts: 1,310 ✭✭✭scheister


    this is a briefing that Revenue issued on EFT's it may answer some of your question
    http://www.revenue.ie/en/about/publications/exchange-traded-funds-guidance-note.pdf


  • #3
    candlegrease
    Registered Users, Registered Users 2 Posts: 475 ✭✭candlegrease


    Thanks for link.

    Unfortunately it does not clarify above Qs


  • #4
    corglass
    Registered Users, Registered Users 2 Posts: 1,113 ✭✭✭corglass


    Also interested in OPs question


  • #5
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭Victor


    candlegrease wrote: »
    If I am to return to Ireland at what stage will these taxation rules apply?
    That will depend on your tax residence / domicile status. You should enquire as to what tax credits are available and whether the exit tax is a tax or a withholding tax (i.e. if you have no liability, you get all teh exit tax back).
    Revenue wrote:
    a taxable event is deemed to take place on the ending of the 8 year period beginning with the date of investment in the ETF
    candlegrease wrote: »
    Should I sell before becoming tax resident in Ireland?
    That is for you and your financial advisors to decide.
    candlegrease wrote: »
    Is it possible to return to Ireland and leave again before the 8 years are up in order to avoid dividend taxation?
    It would seem so for the exit tax. And dividends you (not the fund) receive would be taxed as you receive them.


  • #6
    candlegrease
    Registered Users, Registered Users 2 Posts: 475 ✭✭candlegrease


    Victor wrote: »
    candlegrease wrote: »
    If I am to return to Ireland at what stage will these taxation rules apply?
    That will depend on your tax residence / domicile status. You should enquire as to what tax credits are available and whether the exit tax is a tax or a withholding tax (i.e. if you have no liability, you get all teh exit tax back).
    Revenue wrote:
    a taxable event is deemed to take place on the ending of the 8 year period beginning with the date of investment in the ETF
    candlegrease wrote: »
    Should I sell before becoming tax resident in Ireland?
    That is for you and your financial advisors to decide.
    candlegrease wrote: »
    Is it possible to return to Ireland and leave again before the 8 years are up in order to avoid dividend taxation?
    It would seem so for the exit tax[/]. And dividends you (not the fund) receive would be taxed as you receive them.
    Thanks for response.
    It seems I would be ordinarily resident in ireland until i have lived outside the country three years, at which stage i assume taxation laws would change? 
     I don't fully understand re exit tax. Is it relevant whether stocks were purchased prior to leaving ireland or not? 
    This is all highly complicated


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