ETF Tax Query

M

marko_marcus

Guest
Hi,
I'm considering investing in the ishares ETFs but am unsure of the taxation issues involved. As the ishares trading on London/Euronext are registered as limited companies which are fully domiciled in Ireland, surely they are not deemed by Revenue as "Offshore Funds"?

In this case, are they only liable to the usual 20% CGT instead of the 23% etc? Is a taxpayer obligated to declare ownership of these ETFs on the Form12 tax return as in the case of "Offshore Funds"? As an example, one such ETF is:
[broken link removed]

Thanks,
Marko
 
Have you checked the key post on ETFs in the Savings & Investments forum key posts thread?
 
I believe that the taxation of off-shore funds has been brought in line with on-shore funds, at least for those funds domiciled in the EU.

Assuming that the income and gains are reported correctly and on time - the are reported on a self-assessment basis, unlike onshorefunds - they are taxed as follows

Qualifying funds (see list on revenue site [broken link removed] )
Income : income tax at standard rate (20%) + Healthy levy
Disposal: income tax on gain at std rate+3% (23% like DIRT/Exit Tax) - no Health levy

Other funds
Income/Disposal: Income tax at std rate+3% (23%) - no health levy

Thus "dividend" payments from qualifying ETFs (ISEQ-20 is one) are taxed at 20% and not your marginal rate - good if your marginal rate is 42%

Capital gains are taxed at 23% and not 20% in the case of directly held shares
 
Does anybody know about the tax treatment of ETFs domiciled outside of the EU? I am assuming that most of the ETFs traded on North American markets would be domiciled outside of the EU. Also looking at the revenue list I noticed that it included funds domiciled in Jersey, Isle of Man and Guernsey - all of which I though were outside of the EU?
 
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