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ETF - Tax Treatment

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  • 10-01-2022 1:32pm
    #1
    mortis43
    Registered Users Posts: 36 ✭


    Hi there,

    I'm hoping to start investing in some ETFs. I am Irish resident.

    Am I correct in saying that from a tax perspective I'd be better off investing in to a Lux ETF instead of an Irish one?

    I'd be looking to invest via deGiro.

    Thanks



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    #2
    Ixlandia
    Registered Users Posts: 68 ✭✭Ixlandia


    Hi Mortis, don't know about a Lux etf, but what I can tell you is that investing in an 'Irish' etf will attract a tax rate of 41% on any profits taken. Also if you hold for 8 years you must pretend that your investment is sold and accordingly taxed at 41%, payable on the 8th anniversary of purchase, this is called 'deemed disposal'

    Though I do believe that there has been a recent change by the government to include all etf's regardless of where they are domiciled to be treated like this - I do stand to be corrected.



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    #3
    mortis43
    Registered Users Posts: 36 ✭mortis43


    Thanks very much for the information.

    Would rather avoid 41% tax if at all possible! Im trying to find out now the best type of fund vehicle (structure, domicile) to invest in from a retail Irish resident investor perspective but the information is surprisingly hard to come by.

    does anyone have any info? Would an Lux Ucits (non etf) be suitable?



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    #4
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    https://www.boards.ie/discussion/comment/118480259#Comment_118480259

    Berkshire Hathaway might be a good alternative to an ETF.



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    #5
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    It's worth stating to the OP that there's no zero % option. At the most basic level you're trading off 41% against 33%. Obviously stocks and funds like Berkshire Hathaway have higher potential upside, the volatility will be higher than an ETF, something to think about if you've got an itchy sell trigger finger.



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