Beginning to Invest - All questions go here please

Yeah, you only pay tax on profits. So if you are paying tax then you've made a profit.

The only risk is your ability to pick stocks, if you've picked the right ones you'll make profit.

Bob24 wrote: »

Agree it isn't a reason not to invest, but it is a fact that Ireland is hammering small individual stock market investors in terms of taxation:
1) Our CGT rate is amongst the highest in Europe: https://taxfoundation.org/capital-gains-tax-rates-in-europe-2020/
2) Our CGT exemption threshold is very low (€1,270 vs £12,300 in the UK)
3) Our dividend taxation is *the* highest in Europe: https://taxfoundation.org/dividend-tax-rates-europe-2020/
4) We don't have any type of tax insulated trading account for small investors (like ISA in the UK, PEA in France, etc).
5) We have our very unique deemed disposal rule and high taxation on ETFs which means we can be taxed 41% on profits we haven't even realised (i.e. this is taxation of potential gains rather than actual gains).


In aggregate, Ireland's taxation level is indeed very low vs the rest of Europe. But it is mostly because corporate tax and employer social contributions are a fraction of what most other countries are applying. Other taxes are in par or higher.

For us small individual investors, even the usual suspects of high taxation like France, Belgium, and Nordic countries almost look like tax heavens. And forget about Estonia which is beyond heaven.

What's the Estonia system? I always wondered if you instead and never sold, then moved to Belgium/Estonia for a year in your retirement and cashed out while living there, would that get you the proceeds of a lifetime of gains tax-free?

Hi lads. Complete newbie here to trading. Looking to start buying stocks on Trading212.
Only issue I have right now is getting my head around the tax.
Am I right in saying that the only tax I'll have to pay is the profit earned on the sale of the shares, as long as it's over the CGT threshold (1270 as far as I know)?
I don't want to be messing with ETFs as I've heard that there's some 8 year tax thing here in Ireland.

Shedite27 wrote: »

Any dividends get counted as Income too so you have to pay income tax on that every time you get a dividend.

Yeah ETF's are messy.

And how do I go about paying CGT/IT? Would it be worth calling into the Revenue office if I'm completely clueless about that?

My Father passed away and left my two kids 32K each, they are 7 (twins) I want to invest the money for them until they turn 18. I going to invest it separately. Any suggestions, it doesn't all have to be in on pot either.

Government bond, Prize bond...

Also what would it cost professional advice?

Down the line I know my mothers will does the same (32 K after tax) but hopefully that is a good few years off.

spaceHopper wrote: »

My Father passed away and left my two kids 32K each, they are 7 (twins) I want to invest the money for them until they turn 18. I going to invest it separately. Any suggestions, it doesn't all have to be in on pot either.

Government bond, Prize bond...

Also what would it cost professional advice?

Down the line I know my mothers will does the same (32 K after tax) but hopefully that is a good few years off.

Irish government bonds are fine if you want your capital to be guaranteed in nominal term and to avoid volatility. But given the current situation with negative real interest rates which seems here to stay for a while, you are almost guaranteed that the purchasing power of your investment will be significantly reduced over the next 10 years (due to a combination of inflation and very low or negative interest rates).

IMO, to protect the purchasing power of the capital you need to park at least some of it into equities and gold (especially since your investment horizon is rather long so you can stomach some volatility). Or possibly other asset classes if you want to be more adventurous and sofisticated (farmland, bitcoin, fine art, etc), but with those you will need more homework to know and understand what you are doing.

You can look at different options but shares in this investment trust could be an easy way to do it without having to manage the diversification yourself: https://patplc.co.uk

Basically your money would be parked in a mix of US inflation protected bonds*, defensive company shares, gold (mostly physical and some mining shares), and a bit of cash.

* TIPS, which are treasury bonds with a value indexed on US consumer price inflation.

Timmaay wrote: »

Farmland hmmm, average price in Ireland is in around 10k/acre, and the rental return is the likes of 200e/ac, or 2% per year. During the Celtic tiger the value of land ballooned to 30k/ac in some places, but that was crazy speculation and short lived. As a farmer and landowner myself I'd say there are a hell of alot better places to put your money.

Not necessarily in Ireland.

There was a good episode of Macrovoices on the topic with a comparison to other asset classes: https://www.macrovoices.com/podcasts-collection/macrovoices-spotlight/869-spotlight-4-artem-milinchuck-farmland-investing-now-available-to-all-accredited-investors-the-future-of-investing

The goal isn't necessarily to get better returns than with the stock market, but rather to make a portfolio more anti-fragile by fragmenting it into asset classes which aren't too corelated (and when you calculate your return you also have to take capital appreciation into account, not just the rental yield).

But as I said this is for sophisticated investors who know what they are doing (although I believe we will have easily available securitised or tokenised farmland in a not too distant future).

Mystery Egg wrote: »

Complete noob here.

I'd like to start investing my son's children's allowance. 140 euro per month. He is two, so I'd like to have a lump sum for him when he turns 18.

Any advice?

Try to get the shares in his name, some online brokers allow custody accounts, it will mean the lump sum when they go to cash in is in their name so exempt from inheritance tax

Brayson Billions Toddler wrote: »

I spoke to them on the phone and they told me up front to be fair, it's 1.2%-ish. I also spoke to KBC who were 1.6%.

There's a 1% government levy on that too.

If a stock is listed on NYSE and FTSE, say for example Carnival Corporation, what would be the advantages and disadvantages of buying either? Does the NYSE opening price each day sync with what the FTSE price is at that time of the day, likewise when FTSE opens in the morning does it sync with closing price in NYSE, subject to FX rate changes etc?

Bob24 wrote: »

You probably need to ask Revenue to be registered for CGT.

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/when-and-how-do-you-pay-and-file-cgt.aspx

TBH, they really should make it more clear and straight forward. Even for someone with good will to follow the law and pay the tax they owe, it is confusing to get started.

Correct, you have to ask them to be setup for it, then they send you a form. It'll be my first year doing it this year too so blind leading the blind.

The form seems to just ask for a total gain, is that right that you don't need to list the transactions (obviously keeping the record for 7 years yourself anyway)?

Bob24 wrote: »

After you asked them to set you up, did it add a new option on your Revenue online account to make payments? (since payment is due before you actually file your CGT return)

(same here, rather new to this)

I can't remember if it was there before or not so maybe you can check yours.

On ROS, login and select:
- Payments/Repayments section --> Make a Payment
- Select the radio button for Tax, then select Next
- First option is then Capital Gains Tax - hit Add a Payment alongside that

I don't understand the timelines, it looks like we need to make the payment by 15th December, but have to report the calculation of the payment by October 2021. I won't breach the threshold this year (writing off against a loss) so will just be completing a form by next October.

Here's the mail I got from ROS

I have updated our records and have recorded you for Capital Gains Tax. You will have the ability to make payments towards your CGT taxhead on your myAccount by selecting 'Make a Payment' under the Payments/Repayments tile on your myAccount.

Any gains or losses made on the disposal of an asset or assets can be declared when completing your Capital Gains Tax return (CG1 form).

Please be advised, for disposals made in the initial period of the tax year (01/01 - 30/11) you must pay CGT by 15/12 of the same year. For disposals made in the later period of the tax year (01/12 - 31/12) you must pay CGT by 31/01 of the next year.

I have attached a copy of a CG1 form for your convenience. Please be advised, you must complete and submit your CG1 form by 31/10 of the year following the disposals.

tamova wrote: »

Hey man, thanks for the above. It seems pretty crazy that I have to apply to pay a tax... Anyway, you said you won't reach the threshold this year, but do you have gains that are under the 1270 euro threshold? I understood that if I sold my shares, even if I'm under the threshold, I had to file this with revenue? (see relevant article: https://www.irishtimes.com/business/personal-finance/must-you-file-a-cgt-return-if-no-tax-is-due-1.3342384)

Yes, but I file my return for 2020 by October 2021. So I'll do that in January
https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/when-and-how-do-you-pay-and-file-cgt.aspx

tamova wrote: »

Also, side note, you mentioned they emailed you? Do I have to physically submit this TR1 form (https://www.revenue.ie/en/self-assessment-and-self-employment/documents/form-tr1.pdf) via the post or can I email it to them?

I haven't figured that out yet. I had to email (through ROS website) to get setup to pay CGT, I now need to figure out how to get the form compelted. I have a contact who I'll pick the brains of and repost once I figure it out.