Want to invest in a fund I read about, unsure about tax

ibrahimovic

Had a bit of luck in the bookies and had quite a big win, instead of having access to it and eventually losing it, I have been reading a book about investing, and the guy who wrote the book released a fund -https://plainenglishfinance.co.uk/funds/

It seems in Ireland you only get a capital gains tax allownace of about 1000 a year, where as in the uk its 20k a year if you put it in an isa, typical ****e for this country. So my question is if i open a hargreaves and landsdown acct and put money to invest in this fund, say 10 years down the line when i want to sell it, will I have to pay 33% on any profit I make? Anything else I need to consider? And how do I pay this? The information seems quite difficult to find a clear answer to, surely a lot of people are doing similar stuff, no?

Geuze

The UK CGT allowance is 11,300 GBP.

Francie Barrett

Unless you are a tax resident in the UK, you cannot create an ISA, avail of UK CGT, or open brokerage accounts with institutions based there.

topper_harley2

What attracts you to this fund in particular? No offence, but it sounds like you read one book and now want to invest in the fund the author has released? That doesn't sounds like you have given much thought to the alternatives e.g. other funds, other investments, paying off debt, saving it in bank for house deposit etc.

I had a quick look at the fund you linked............have you looked at the charges for the fund in the KIID document?

Charges taken from the fund over a year
Ongoing charges 1.14%

Anything over 1% is way too expensive. You can buy a US domiciled ETF for a fraction of the annual charge, through Degiro. ETFs have been discussed at length on this forum already. Investing a large win like this requires much more thought than I think you have given it.

ibrahimovic

Yeah I'm In Ireland. Was just venting that the Uk have it much better than us, still no clearer on my original question, very confusing stuff!

topper_harley2

Investing in foreign funds like this is not easy. You have issues with fund domicile, double taxation rules, dealing with foreign brokerage houses etc. So basically you will have to do alot more investigation yourself, as each case is different.

So, what, exactly is your original question? You asked five different questions:

So my question is if i open a hargreaves and landsdown acct and put money to invest in this fund, say 10 years down the line when i want to sell it, will I have to pay 33% on any profit I make? Anything else I need to consider? And how do I pay this? The information seems quite difficult to find a clear answer to, surely a lot of people are doing similar stuff, no?

1. I dont know if you can open a Hargreaves and Landsdown account, I never heard of them before this thread. Looking at their website, they very UK-specific. Have you emailed them to ask if they accept Irish clients?

2. Based on above, I dont know if you can buy this fund easily.

3. Since that fund is domiciled in UK, I think its a UCIT fund, meaning it is not eligible for CGT, instead its exit tax, currently 41%. However, with Brexit, I don't know if that is correct anymore! Big assumption that you will make a profit If this fund pays dividends, you will need to pay PRSI and USC each year on the dividends.

4. Anything else to consider? Please read my previous post about other alternatives vs investing, and consider whether you have thought this through or not.

5. Yes other people are investing in things like this. However, most people avoid complex scenarios like this (of having a foreign broker with fund that the broker owns).

Note, this fund was only launched in August this year, as per https://markets.ft.com/data/funds/tearsheet/summary?s=GB00BDZZSM84:GBX

If you are set on investing, you should investigate ETFs rather than managed funds. People try to minimise AMC, using ETFs, so choosing a managed fund is the exact opposite of this. If you want a managed fund, just use Irish Life MAPS, which will handle all of the above tax, domicile issues for you.

Does this help at all?

ibrahimovic

oh thanks for the reply. jesus that's all very complicated. I was attracted to it as it's very low risk, in the last crash it would have only fell 10% compared to most other funds falling 40-50%. Not sure what i'll do now. Maybe i'll just buy a load of gold and dig it in me garden :P

topper_harley2

ibrahimovic wrote: »

oh thanks for the reply. jesus that's all very complicated. I was attracted to it as it's very low risk, in the last crash it would have only fell 10% compared to most other funds falling 40-50%. Not sure what i'll do now. Maybe i'll just buy a load of gold and dig it in me garden :P

Past performance is not a measure of future performance. I'm sure if I created a fund today with 100 stocks, I could pick them with hindsight that they also only dropped 10% during recession. The trick is to do it before it happens

As I mentioned, there is lots of other things other than investing:
Do you

• Have any credit card debt? Pay if off immediately with lump sum
• Have you a mortgage? You can overpay it with lump sum, saving 000s on interest
• Are you saving for anything in particular? e.g. would this be useful for house deposit? If so, stick it in bank and wait
• Its money won, have you considered a holiday?
• Do you have a pension? If you so can dump it into that as an AVC before end of year (http://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx)
• Put it on Man City to win the league or Dublin to win 10 in a row

As you can see, there are loads of other options versus throwing it at a flashy fund that was only set up last month. However, you have given no information that would assist providing sensible other options.

Over to you.....

gavmcg92

ibrahimovic wrote: »

oh thanks for the reply. jesus that's all very complicated. I was attracted to it as it's very low risk, in the last crash it would have only fell 10% compared to most other funds falling 40-50%. Not sure what i'll do now. Maybe i'll just buy a load of gold and dig it in me garden :P

I think what you have learned so far is something we all know, investing is not easy. You really need to take your time and read plenty of investment books. 
If you want to get this money out of your hands as quickly as possible, as you are afraid that you'll just piss it all away, then go speak to a fee based independent financial advisor. They can look at your current financial road map and make recommendations based on your upcoming/ongoing life events. If that doesn't sound like the road you want to go down, then look at passive ETF portfolios that you can replicate with the likes of Degiro.