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Child Item

Beginning to Invest - All questions go here please

iMax

Guys,

Looking for a little bit of info from those more knowledgeable than me.

My five year old daughter has the above sum in her college fund. We've really skimped for it over the years (started before she was born).

Times are getting harder for us economically & it looks like we won't be able to contribute to it like we were (or at all) for the foreseeable future, but I want to keep it growing if at all possible.

It's currently in an AIB kids account where it ears a meager interest rate.

We were thinking of maybe the state solidarity thing or prizebonds (someone's gotta win, right???). IS there anything else we should look at ? No risk is much preferred (as much as anything can be no risk). I know you don't get as high a return, but it's my daughter's future I'm dealing with.

We don't mind it being locked away (probably a good idea in the long run). Also we'd like to be able to capitalise by being able to add to it if possible.

Looking forward to the replies

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iAcesHigh

arleitiss wrote: »

I have question on capital gains tax.

Let's assume (Big assumptions and optimism): I put in €2000 into stocks today.
Going forward - I am putting €200 per month into stocks for the next 20 years.

So in 20 years time, I've deposited total of: €48'000 (Monthly) + The original €2000 = €50'000

Let's assume in 20 Years those €50'000 I've been putting in are worth €150'000 (Optimistic but for illustration/simplicity purposes)

And I decide to sell everything and walk away.
Would I have to pay 33% CGT on €150'000 leaving me with profits of: €51'770 (+ First €1270 CGT exemption)
or would it be paid against €100'000 of profits (Total SUM - Deposits) leaving me with: €68'270 Profits

you would pay 33% on your winnings, so €32580.9 and would be left with €67419.1

arleitiss

iAcesHigh wrote: »

you would pay 33% on your winnings, so €32580.9 and would be left with €67419.1

Oh that's not too bad then at first I was kind of put off by CGT but if it only applies to profits then it's not too bad I guess.

Thanks.

iAcesHigh

arleitiss wrote: »

Oh that's not too bad then at first I was kind of put off by CGT but if it only applies to profits then it's not too bad I guess.

Thanks.

It's still one of the highest rates in EU

But yeah, it wouldn't make sense if they taxed your money that was previously taxed somewhere else

Bob24

arleitiss wrote: »

Oh that's not too bad then at first I was kind of put off by CGT but if it only applies to profits then it's not too bad I guess.

Thanks.

And just to add that if you are considering ETFs you have the deemed disposal rule, so the state will start taxing you before you are actually selling.

Kilboor

arleitiss wrote: »

Oh that's not too bad then at first I was kind of put off by CGT but if it only applies to profits then it's not too bad I guess.

Thanks.

Wait until you make 10k profit and end up with 7k

Roger Mellie Man on the Telly

So, assuming you make a profit each year, you could withdraw €1270 CGT free per year every year. After 20 years take any remaining profit and pay CGT.

However, compound interest will be affected by this approach.

arleitiss

Roger Mellie Man on the Telly wrote: »

So, assuming you make a profit each year, you could withdraw €1270 CGT free per year every year. After 20 years take any remaining profit and pay CGT.

However, compound interest will be affected by this approach.

To be honest, I am not that bothered about CGT if it's calculated only on profits (as confirmed above) that was my main concern.

I am just looking to put away €200 per month somewhere which is higher risk than bank savings account (I am putting most into savings account but at this point it feels like dead fish at AER 0.4000% interest rate).

I will be just happy if anything comes out of €200 per month over long period of time, if not - so be it

Taylor365

arleitiss wrote: »

To be honest, I am not that bothered about CGT if it's calculated only on profits (as confirmed above) that was my main concern.

I am just looking to put away €200 per month somewhere which is higher risk than bank savings account (I am putting most into savings account but at this point it feels like dead fish at AER 0.4000% interest rate).

I will be just happy if anything comes out of €200 per month over long period of time, if not - so be it

And if you lived up north, you could take out £12,000 profit a year, every year, TAX FREE!

:pac:

Mantis Toboggan

arleitiss wrote: »

To be honest, I am not that bothered about CGT if it's calculated only on profits (as confirmed above) that was my main concern.

I am just looking to put away €200 per month somewhere which is higher risk than bank savings account (I am putting most into savings account but at this point it feels like dead fish at AER 0.4000% interest rate).

I will be just happy if anything comes out of €200 per month over long period of time, if not - so be it

Just remember that stocks go down as well as up.

tamova

Roger Mellie Man on the Telly wrote: »

So, assuming you make a profit each year, you could withdraw €1270 CGT free per year every year. After 20 years take any remaining profit and pay CGT.

However, compound interest will be affected by this approach.

I have asked about this approach before, but never got a full answer - can you do this? I think I'm on track to make 1270 profit this year, is it in my best interest to sell these stocks, declare it to revenue and then buy them back again?

Taylor365

tamova wrote: »

I have asked about this approach before, but never got a full answer - can you do this? I think I'm on track to make 1270 profit this year, is it in my best interest to sell these stocks, declare it to revenue and then buy them back again?

Yes. Gain is gain.

You can't sell and buy back to harvest a loss.

tamova

Taylor365 wrote: »

Yes. Gain is gain.

You can't sell and buy back to harvest a loss.

My question is more so should I be selling every year to get the tax free exemption? Is there a hold time I must wait before re-buying stock?

Edit - forgot to say, I only buy stocks for long-term investing.

Shedite27

tamova wrote: »

My question is more so should I be selling every year to get the tax free exemption? Is there a hold time I must wait before re-buying stock?

Edit - forgot to say, I only buy stocks for long-term investing.

I've been struggling to find a concrete answer on this.

Link that says you can: https://www.paylesstax.ie/sale-of-shares-tax-saving-tips/
Link that says you can't - https://www.lifetimefinancial.ie/tax-saving-tips-managing-stocks-shares/

tamova

Shedite27 wrote: »

I've been struggling to find a concrete answer on this.

Link that says you can: https://www.paylesstax.ie/sale-of-shares-tax-saving-tips/
Link that says you can't - https://www.lifetimefinancial.ie/tax-saving-tips-managing-stocks-shares/

Very confusing. I wonder how they can even regulate the 30 days thing if that's true...

Edit - https://www.irishtimes.com/business/bed-and-breakfast-option-offers-cosy-tax-benefit-1.281787?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fbed-and-breakfast-option-offers-cosy-tax-benefit-1.281787 this article says you are allowed to sell and buy back within a day...

Bob Harris

If you sell shares for a profit to use up your cgt allowance you can buy them again whenever you like, no 4 week rule applies.

If you sell shares for a loss, you can only use this loss to offset other gains if you do not buy the same shares back within 4 weeks.

Blowheads

Hi all,
Have an account on Interactive Investor. Hold little stocks and an not active, bought a few for long term holding. Now they want to charge me 9.99 GBP a month for the pleasure, it will cost me more per month in fees than any profit in dividends.

Where is a good platform to transfer and hold stocks for free or even trade stocks for low?

Thanks

Kilboor

Blowheads wrote: »

Hi all,
Have an account on Interactive Investor. Hold little stocks and an not active, bought a few for long term holding. Now they want to charge me 9.99 GBP a month for the pleasure, it will cost me more per month in fees than any profit in dividends.

Where is a good platform to transfer and hold stocks for free or even trade stocks for low?

Thanks

Can't go wrong with Degiro for long term trading. Minimal transaction fees, no deposit limit, and no monthly fees.

Blowheads

Kilboor wrote: »

Can't go wrong with Degiro for long term trading. Minimal transaction fees, no deposit limit, and no monthly fees.

Thanks

Am in position 5010 in the queue ðŸ˜ðŸ˜

tamova

Blowheads wrote: »

Thanks

Am in position 5010 in the queue ðŸ˜ðŸ˜

There's hope - I got accepted today. Thinking it took like 3-4 weeks and I had a much higher number than that.

Taylor365

Degiro are starting to cut corners, so who knows for how long!

outonawing

Trading 212 offer no fee trading, don't know if they accept transfer from other broker.

Biffoland

If you’re coming out with less than €1270 profit in a year, do you still need to submit a tax return?

Nemeses2050

As far as I know, even though there's no CGT, once there's disposal a return must be submitted.

tamova

Bob Harris wrote: »

If you sell shares for a profit to use up your cgt allowance you can buy them again whenever you like, no 4 week rule applies.

If you sell shares for a loss, you can only use this loss to offset other gains if you do not buy the same shares back within 4 weeks.

Do you have a source for this? I want to believe!!

Bob Harris

For paying CGT owed:

Gains Jan - Nov pay by 15th Dec
Gains Dec 1st - 31st pay by 31st Jan

For declaring CGT even if below the €1270 exemption
By 31st October in the year following disposal

Bob Harris

tamova wrote: »

Do you have a source for this? I want to believe!!

Not even revenue set it out clearly.

It's essentially to stop below profiting from losses.
i.e. you lose money on a trade but use the loss to offest gains and reduce your CGT liability. Then you buy back the same shares.
If the price has fallen now you've reduced your CGT on other gains and now bought them back for less. This is why the 30 day rule is in place.

Taylor365

Bob Harris wrote: »

Not even revenue set it out clearly.

It's essentially to stop below profiting from losses.
i.e. you lose money on a trade but use the loss to offest gains and reduce your CGT liability. Then you buy back the same shares.
If the price has fallen now you've reduced your CGT on other gains and now bought them back for less. This is why the 30 day rule is in place.

Or a "wash sale" in American lingo.

Shedite27

Looking through my portfolio, one of my stocks (MTCH) has a short ratio of 20. Sticks out like a sore thumb on the list where everything else is under 7. I understand this means it will take 20 days of average trading volume to cover the shorts, but as a shareholder what's the effect of it.

For me, I like the company, but assume quite a lot of people don't. Is 20 indicative of a short squeeze? The share price has been fairly consistently rising, is that likely due to covering shorts?

Apart from a lot of folk not liking the company's valuation, is there anything else to watch out for?

gamera81

Hi Guys. Just a quick question for you. I am going to put 10k for two ETFs next week. And will do the same thing I did in 2009 during the recession. I bought polish Funds and left them for 8 years and after that time I sold them. The Fund did all the taxes for me. But this time I am planning to do this myself as ETF charges just 0.07%. Can you please help me with taxes here. If i put that money and turn off my Degiro for 7 years. Will revenue not be looking for me as we know ETF is paying dividends once or twice a year. Do I have to declare this every year or can I do it at the time I login again after 7 years.

Thank You

Bob24

gamera81 wrote: »

Hi Guys. Just a quick question for you. I am going to put 10k for two ETFs next week. And will do the same thing I did in 2009 during the recession. I bought polish Funds and left them for 8 years and after that time I sold them. The Fund did all the taxes for me. But this time I am planning to do this myself as ETF charges just 0.07%. Can you please help me with taxes here. If i put that money and turn off my Degiro for 7 years. Will revenue not be looking for me as we know ETF is paying dividends once or twice a year. Do I have to declare this every year or can I do it at the time I login again after 7 years.

Thank You

If you are going for a distributing ETF (ie which is paying dividends to you), yes you will have to declare dividends to Revenue each year and pay tax on it.

Alternatively you can go for a capitalising ETF (which will reinvest the dividends in new shares rather that paying them to you), and doing that you have no tax liability before you sell your ETF shares or 8 years have passed since you purchased the shares (whichever comes first).