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Investing in funds (S&P500) - Tax Implications

  • 21-05-2019 3:32pm
    #1
    Banned (with Prison Access) Posts: 172 ✭✭ devlinio


    Hi

    I'm looking to start investing in index funds. I'm curious about tax implications. Do I only pay tax when I sell and receive dividends (I assume this is this case) or do I have to pay tax if the value rises even if I don't sell? (Someone was saying this to me).


Comments

  • Registered Users Posts: 379 ✭✭ ryanch09


    devlinio wrote: »
    Hi

    I'm looking to start investing in index funds. I'm curious about tax implications. Do I only pay tax when I sell and receive dividends (I assume this is this case) or do I have to pay tax if the value rises even if I don't sell? (Someone was saying this to me).

    You pay income tax on dividends and capital gains tax when you sell your holdings. You don't pay any CGT until you actually sell, and only on the profits you make from that sale (if any)


  • Registered Users Posts: 226 ✭✭ Shai


    ryanch09 wrote: »
    You pay income tax on dividends and capital gains tax when you sell your holdings. You don't pay any CGT until you actually sell, and only on the profits you make from that sale (if any)
    this is not correct for UCITS (EU) ETFs, which the OP is probably looking into buying. See https://www.bluewaterfp.ie/investments/deemed-disposal/. Loss offset for UCITS ETFs is also less favorable than for US ETFs.


  • Registered Users Posts: 379 ✭✭ ryanch09


    Shai wrote: »
    this is not correct for UCITS (EU) ETFs, which the OP is probably looking into buying. See https://www.bluewaterfp.ie/investments/deemed-disposal/. Loss offset for UCITS ETFs is also less favorable than for US ETFs.


    Interesting, I'm only a few months into investing myself so am not fully aware of the nitty gritty tax stuff, and have a few shares of a UCITS ETF. Does this mean I need to declare every 8 years, or do I need to declare annually and revenue only tax it in the 8th year?


  • Registered Users Posts: 226 ✭✭ Shai


    I personally dont know. Hopefully someone else can help you out with that. Myself, I opted to set up an account with a US broker (firstrade.com) so I have access to non-UCITS ETFs and therefore more favorable taxation and loss offset rules.


  • Registered Users Posts: 142 ✭✭ aridion


    I am in a similar boat. Want to find out the tax implications. I am Irish, but live and work abroad, however have a degiro.ie account to invest.


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