Experienced property investor, but virgin stock market trader.

Gordon Gekko said:
Sarenco, are you deliberately missing the point? Your statement regarding spouses was blanket when in fact it's only an issue between a US citizen spouse and a non US citizen spouse.
Click to expand...

I'm not deliberately trying to miss your point, I'm simply trying to clarify your position.

You agree (I think) that, in general, a liability to US estate tax arises for any non-resident alien on inheriting US assets (including securities issued by a US company) with a fair market value in excess of $60,000. It doesn't matter whether the US assets are inherited from a non-US citizen.

The only reason I mentioned a transfer to a spouse on death (the second part of the sentence that you take issue with) is that such an inheritance would be exempt from Irish inheritance tax and therefore the US estate tax would be a sunk cost.

What am I missing?
 
Last edited:
Sarenco said:
I'm not deliberately trying to miss your point, I'm simply trying to clarify your position.

You agree (I think) that, in general, a liability to US estate tax arises for any non-resident alien on inheriting US assets (including securities issued by a US company) with a fair market value in excess of $60,000. It doesn't matter whether the US assets are inherited from a US citizen or a non-US citizen.

The only reason I mentioned a transfer to a spouse on death (the second part of the sentence that you take issue with) is that such an inheritance would be exempt from Irish inheritance tax and therefore the US estate tax would be a sunk cost.

What am I missing?
Click to expand...

The fact that it's only really an issue for spouses if the deceased spouse is a US citizen...
 
Ok, so if a non-US citizen dies and leaves material US assets to a non-US citizen spouse are you saying that there is no liability to US estate tax? Or are you saying that there is a liability but it can be ignored?
 
some contributors are being quit hard on the OP , his idea is pretty sound in that he openly admits to having little experience when it comes to investing in the stock market , he is right to go with index funds rather than individual stocks , its all very well saying that the tax situation is less desirable when it comes to ETF,s but the first priority should be to avoid losses and for inexperienced investors , buying individual stocks is very risky , its a shot in the dark

OP , if I were you I would do the following

open an account with the likes of saxo or TD investing or whoever ( avoid the irish brokers as they are extortionate in terms of fees )

pick the following three ETF,s on the Amsterdam exchange so that way you are denominated in euro

VUSA = the S+P
VEUR = a fund which covers about 600 stocks spread across europe
VFEM = emerging markets fund

an even simpler alternative is to buy one single global etf , this is comprised of thousands of companies , about 50 % north America , thirty % Europe , the rest is in japan and emerging markets

this can be bought on the Amsterdam exchange under the ticker symbol VWRL

all of the above are vanguard etfs which are the cheapest of all etf providers and the worlds second largest after blackrock - ishares
 
galway_blow_in.....thanks very much for the advice....
A few questions....requiring easy to understand (Please) answers

Why do I need to be denominated in Euro?

I guess the cost for buying them depends on the broker. I think TD Waterhouse charge only 20 euro to buy or sell. If I sell in 5 to 10 years, are there maintenance costs? Am I right in saying because it's an ETF, I pay my marginal rate of tax, or is it a straight 41%? How about USC and PRSI?
What happens regarding tax with any dividends received?
What is this rolling 8 year thing I have heard discussed?

Also I read Rory Gillens book "3 steps to investment success" recently and found it fascinating, specifically the chapter on value investing in the FTSE 100.
In summary..... Picking 15 of the top FTSE 100 stocks (in terms of low price to earnings ratios), or picking 15 of the top 30 across the sectors, will ensure that you obtain GOOD VALUE stocks.
Keep the stocks for a year and then repeat the exercise, selling those which fall out of the top 15 and buying those which enter the top 15.
Has anyone adopted this approach? Is it risky? I would be interested in investing a small amount this way. The rest in more secure diverse ETFs.
Selling individual shares attracts CGT only? No USC or PRSI?
 
Last edited:
landlord said:
Also I read Rory Gillens book "3 steps to investment success" recently and found it fascinating, specifically the chapter on value investing in the FTSE 100.
In summary..... Picking 15 of the top FTSE 100 stocks (in terms of low price to earnings ratios), or picking 15 of the top 30 across the sectors, will ensure that you obtain GOOD VALUE stocks.
Click to expand...

This is a well known strategy it has been around for along time. Do a search on 'Dogs of the Dow', in post places I've seen it used it worked out very well over the long term. However in each case it was being applied to small (under 30/40 positions) well diversified large cap indexes such as the SMI, STOXX50 and the CAC 40. I have not seen it operate on such a large index as the FTSE, but my concern would be that you might end up very heavily weighted in a particular sector. So do your research.
 
Just out of curiosity where can you find a listing of the FTSE 100 stocks and their price to earnings ratios?......I am wandering how diverse the top 15 or top 30 will be.
 

When I click on UK INDICIES, then FTSE 100 I can view all the stocks, but I have to click on each individual stock to view the price to earnings ratio. Is there anywhere that lists the ratios with the list of all 100 shares? Thanks
 
RichInSpirit said:
Open a spread betting account and forget about tax!
Click to expand...

spread betting is for a minority of experienced investors who are highly tolerant of risk , its not for newbies
landlord said:
galway_blow_in.....thanks very much for the advice....
A few questions....requiring easy to understand (Please) answers

Why do I need to be denominated in Euro?

I guess the cost for buying them depends on the broker. I think TD Waterhouse charge only 20 euro to buy or sell. If I sell in 5 to 10 years, are there maintenance costs? Am I right in saying because it's an ETF, I pay my marginal rate of tax, or is it a straight 41%? How about USC and PRSI?
What happens regarding tax with any dividends received?
What is this rolling 8 year thing I have heard discussed?

Also I read Rory Gillens book "3 steps to investment success" recently and found it fascinating, specifically the chapter on value investing in the FTSE 100.
In summary..... Picking 15 of the top FTSE 100 stocks (in terms of low price to earnings ratios), or picking 15 of the top 30 across the sectors, will ensure that you obtain GOOD VALUE stocks.
Keep the stocks for a year and then repeat the exercise, selling those which fall out of the top 15 and buying those which enter the top 15.
Has anyone adopted this approach? Is it risky? I would be interested in investing a small amount this way. The rest in more secure diverse ETFs.
Selling individual shares attracts CGT only? No USC or PRSI?
Click to expand...


you don't have to buy the ETF,s I recommended in euro denominated form , by all means buy in dollars , the dollar denominated options are more liquid anyway , some prefer to keep things in euro as it avoids having to transfer from euro to dollars when you first open your account

maintenance costs will not be very high , certainly a lot less than what irish life or the likes of bank of Ireland finance would charge

I don't know about the tax implications , if you plan to buy and hold , I doubt its all that relevant , the amount of dividends you receive will be small on those index funds but the broker will send you dividend schedules yearly
 
Think about getting a bit of training on investing. I often use the following analogy: 'What has investing and driving a car got in common?'

If we want to drive and control the risks involved in driving, we take lessons. We pay attention to the rules of the road, we slow down in congested areas, we stop at the traffic lights. When we control the risks in driving we can gain from the enormous benefits of driving.

So, too, it is with investing. Rule no. 1: Learn what risks you face when investing in risk assets (like shares, hedge funds, commodities etc). Rule no. 2: Adopt a strategy to mitigate those risks. Do that and over a long period of time you can obtain the superior returns on offer from equities and other risk assets.

Rory Gillen
GillenMarkets.com
 
Is it still the case that there is a 1 % stamp duty charge on share purchase, but not on ETFs?
 
No stamp duty on European shares (ex-Ireland, ex-UK), although a financial transaction tax may be introduced at some stage.

It's also worth bearing in mind that investment funds/ETFs will pay stamp duty on acquiring shares in Irish & UK companies.
 
Let's say for example you have 2,000 euros to invest.......
If the same Vanguard S and P 500 ETF is listed on both the Amsterdam (denominated in euro) and the New York (denominated in dollars) Stock Exchanges, then would there be much difference if for example (1000 Euro/1,000 Euro converted to Dollars) were invested in each exchange for one year and then the latter converted back to Euro?

The fund doesn't have the same ticker, however the underlying stocks in the Amsterdam denominated ETF would be physically replicated.see link below.

http://www.etfstrategy.co.uk/vangua...n-nyse-euronext-in-amsterdam-and-paris-48652/

So the differences between the funds are....

S and P 500 ETF (VUSA) ON EURO STOCK EXCHANGE ......
TER 0.09%
41% exit tax on gains and distributions (dividends)
No loss relief.

S and P 500 ETF (VOO) ON N.Y. STOCK EXCHANGE.....
TER 0.05%
Conversion costs Euro to dollar on setup
CGT 33% on exit and income tax, USC and PRSI on distributions (dividends)
Loss relief
Conversion costs dollar to Euro on exit.

Now for the maths.....?.....
 
Last edited:
Many thanks to everyone who assisted on this thread and other threads. After taking all the advice on board, I have a plan!!

MY STRATEGY/PRIORITIES.......

PAY OFF DEBT !!
3000 a month has/will be going toward paying off mortgage "CAPITAL"(home/RIP)

LUMP SUM INVESTMENT
50%---- iShares Core EURO STOXX 50 UCITS ETF (SXRT) (EUR) accumulating (TER 0.10%)
20%---- iShares Core MSCI World UCITS ETF (IWDA) (EUR) accumulating (TER 0.2%)
10%---- iShares Core Emerging Markets IMI UCITS (EMIM) (EUR) accumulating (TER 0.25%)
10%---- PRSA AVC (still confirming if I am able to do this within SFT limits and considering tax free lump sum and max annual age related contribution limits )
10%---- cash

MONTHLY INVESTMENTS €500-€1000
(Euro/pound/dollar cost averaging) into zero income value stocks.
Starting with Berkshire Hathaway B. (i'm not sure if this is classed as a value of stock but it is certainly a highly recommended zero income stock).

REASONING.......

This portfolio would be geared towards the long-term, medium risk, lump sum, investor with little appetite for continuous tax accounting and a fear of a long term strengthening of the Euro.

Medium risk considering a 15-20 year window.

Reduced currency risk. Portfolio geared more towards Euro stocks. (due to concern over the euro strengthening during the 15 to 20 year investment period).

No currency conversion costs (for the lump sum part) and minimal stockbroker purchasing costs.

8 years deemed disposal at 41% for EU (UCITS) ETF will have to be accepted over the U.S. ETFs better 33%CGT for the benefits to the long term investor. (inability to get accumulating US ETFs)

Zero Income (accumulating funds) avoiding dividend income tax at 40%, USC 8% and PRSI 4%.

Benefit from compounding (dividends reinvested).

No tax annual tax headache, due no income to account for.

Reduced exposure to the lack of "loss relief" given the 15-20 year investment.

Relatively Low cost TERs

No stamp duty on ETFs (or the U.S. stock Berkshire Hathaway)

Reasonable tracking errors.
 
Last edited:
You must log in or register to reply here.
Back
Top