# Investing in Rabo Bank funds



## allo

Is it a good investing policy to invest in the above funds.It seems to me that all the spadework is taken care of but apart from buying their recommended fund of the month no other advice is given. As I am a rank amatuer at this game I haven't a clue when to sell, presently I am ahead by about 1000euros and I am enjoying the experience.I feel this method of small investment is right for me as I don't trust irish ba nks or their recommendations.Thanks in advance for any advice
Allo


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## room305

Be sure to make yourself familiar with the associated tax issues for all funds except the Oppenheimer ones. If you do a search for related threads you will get some info.

Personally, I found the taxation issues to be such a pain that I discontinued my investment with the funds.


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## RaboDirect

Please see the following link regarding the tax treatment of ALL RaboDirect funds. [broken link removed]

You are able to download statements which detail the profit and loss on each fund transaction. To make life easier for our customers we will be developing a calculator that will make it very simple for you to determine your profit (or loss) each year. For example, if you made three transactions in the same fund in one year you will have bought them at different prices. The calculator will do the hard work for you in determining the overall profit. We will release this calculator in our secure site in the coming months. 

Regards,
RaboDirect


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## CCOVICH

It would make life easier for the customers if Rabo deducted and paid over the tax to Revenue like other fund providers.


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## KCT

Must agree with you there, I pulled out of my funds with them as I couldn't get a handle on the tax.


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## room305

RaboDirect said:


> You are able to download statements which detail the profit and loss on each fund transaction. To make life easier for our customers we will be developing a calculator that will make it very simple for you to determine your profit (or loss) each year. For example, if you made three transactions in the same fund in one year you will have bought them at different prices. The calculator will do the hard work for you in determining the overall profit. We will release this calculator in our secure site in the coming months.



Unless Rabo actually start collecting tax and handing it over to the revenue there is no way I would reconsider using Rabo investments. The fees charged are not justified when you are forced to do all the difficult work yourself. I could buy into a greater range of funds and ETFs through an online brokerage like Internaxx and enjoy the same administrative headache, only with much lower fees.

My brother is a tax accountant and I got him to look at the Rabo funds and he certainly considered the taxation issue to be non-trivial. If for example, I cash out a particular fund at a profit and then immediately reinvest in another fund, it is his opinion that tax is liable on the profit despite reinvesting. However, this would not be the case with many other funds (Quinn Life for example).

Rabo deserve plaudits for both the extensive range of funds available and the ease with which money can be invested but the taxation issue makes them unsuitable for ordinary investors, in my opinion.


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## ClubMan

Have to agree - whatever the technical reasons might be for leaving tax issues to the customer, in my opinion putting the burden of figuring out the tax issues onto the customer erodes one of the key advantages of investing indirectly in shares through a unit linked fund: simplicitly*. In addition the standard charging structure of 0.75% on entry and again on exit along with annual management charges which can be bettered is another incentive for people to look elsewhere. Just my tuppence worth.

* Having said that the recent discussions about the _Finance Act 2006 _(?) rules which seem to imply that 8 years in any unit linked fund or _UCITS _triggers a capital gains milestone at which point the investor must calculated gains and assess the tax due seems to erode the tax simplicity of indorect investments generally! There are some recent threads on this issue which doesn't seem to have received extensive coverage elsewhere (e.g. in the media).


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## camlin90

I cannot understand why Rabo will not deduct this tax at source. This is a major disincentive to invest in this product. 

Given that tax is not being deducted at source I would at least have expected more thorough information to be provided on the website. A link to revenue.ie which throws up hundreds of different forms really doesn't suffice.

Does anyone know what form a PAYE taxpayer should submit to declare income from these funds?
I am speculating that Form 12 is required and the income should be declared under "Untaxed income arising in the state - other investments"?
However I am not sure whether Revenue will tax this at the correct rate of 23%.

[Re searching for information in previous threads - I have already trawled through several other threads on this issue and was unable to find a conclusive answer]


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## ClubMan

BTW - just checked with somebody in the business and it seems that while the new 8 year rule that can trigger _CGT _events while still invested will apply to most or all unit linked/_UCITS _funds the provider will normally deal with this tax issue within the fund and notify the investor. I thought that the investor might be individually responsible for dealing with it.

I suspect that the forms needed for filing/paying _CGT _arising from the _Rabo _funds are [broken link removed].


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## camlin90

ClubMan said:


> I suspect that the forms needed for filing/paying _CGT _arising from the _Rabo _funds are [broken link removed].


Hi ClubMan - Rabo website states tax is payable at 23% - CGT rate is 20% ??


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## smiley

I cannot understand why people are finding it hard to understand the tax issues here......if you cash in fund, you pay 23% tax (gross roll up and not CGT) on profit...if you make a loss on an encashed fund in same year deduct from profit and then pay your 23% on the remaining amount.....what is so difficult about this????...am i missing something???


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## camlin90

Fair enough - but how is the tax declared?
What form and under what category???


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## smiley

oh sorry, then again i think revenue 'fifo' rules apply.....which makes it a bit messier!!

the form you use is not a cgt form...it is 'Form 12'...thats what revenue handed me.


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## ClubMan

John J said:


> Hi ClubMan - Rabo website states tax is payable at 23% - CGT rate is 20% ??


Sorry - my mistake in mentioning _CGT _above I think.


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## RaboDirect

Please see below some further clarification from our website re tax treatment: [broken link removed]
scroll down to 'Tax'. Apologies for the length of the post. 

*Why are RaboDirect funds taxed differently to some other Irish funds?*

All funds offered through RaboDirect are sold as either Undertakings for Collective Investments in Transferable Securities (UCITS) or SICAVs, a UCITS set up in Luxembourg. A UCITS is a type of fund structure that is freely marketable within the European Union. 20 of the 23 funds available through RaboDirect are Luxembourg based SICAVs. In these circumstances, the investor must self-assess themselves for Irish tax in respect of any increase in value on the investment on the disposal of the investment or on the eighth anniversary of the investment. Each investor must make the necessary timely returns to the Revenue in order to avail of the necessary tax benefits outlined above.
3 of the 23 funds available through RaboDirect are Irish UCITS. Irish UCITS are usually taxed at source. This means that the fund administrator collects and pays over any tax liability to the Revenue on behalf of the investor. However there are a number of exceptions to this rule and one of these is where the funds are held in a recognised clearing system. The units in the Irish UCITS offered by RaboDirect are held in a recognised clearing system. In a clearing system the details of the underlying investor (customer) are not available to the administrators for the purpose of making tax deductions at source. As a result, the investor must again self-assess themselves for Irish tax in respect of any increase in value on the investment on the disposal of the investment or on the eighth anniversary of the investment. Each investor must make the necessary timely returns to the Revenue in order to avail of the necessary tax benefits as outlined above.

*What happens if I sell one RaboDirect fund and invest in another?*

Investor is liable to pay tax on the increase in value of the investment when they are selling one RaboDirect fund and investing in another. There is no exemption on the tax payment if investors decide to buy another RaboDirect fund. From a tax point of view they are considered separate transactions​ 
*What is my tax liability if I buy units in the same RaboDirect fund at different times and then sell some of these units?*

While Revenue do not have a preference for the method of calculation used, First in, First Out (FIFO) is the most common method of calculating the tax charge where a person hold units in the same fund which have been purchased at different dates. FIFO is where the units bought at the earlier date are considered to be disposed of first. The example below illustrates how FIFO works:
For example 
2005 bought 100 units in X fund @ €1 per unit 
2006 bought 100 units in X fund @ €2 per unit 
2007 sold 150 units in X fund at @ €3 per unit 
Total Gain = 
150 units @ €3 (sold in 2007)= €450 
So following the FIFO rule 
100 units (bought first in 2005) @ €1= €100 
Then 
50 units (of the 100 units bought in 2006) @ €2= €100 

Total amount liable for tax is the gain made from the transaction so 
€450-€200= €250 
Therefore the investor is liable to pay tax on the €250 gain he made 

This example is for illustrative purposes only. 

This is only a general tax summary. Individual circumstances may differ. The tax situation may change in the future. Taxation is a complicated issue and we recommend that you seek advice from a tax adviser.


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## room305

smiley said:


> I cannot understand why people are finding it hard to understand the tax issues here......if you cash in fund, you pay 23% tax (gross roll up and not CGT) on profit...if you make a loss on an encashed fund in same year deduct from profit and then pay your 23% on the remaining amount.....what is so difficult about this????...am i missing something???



Actually if you make a loss on one fund and a gain on another you cannot offset one against the other. It is not one "umbrella" fund but multiple funds, each of which must be treated and declared separately on encashment, for tax purposes.

It is entirely possible to make a loss over the course of the year and still owe taxes to the revenue!

As I said, in my opinion a bit of an administrative nightmare and not really suitable for the casual investor.


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## ClubMan

RaboDirect said:


> This is only a general tax summary. Individual circumstances may differ. The tax situation may change in the future. Taxation is a complicated issue and we recommend that you seek advice from a tax adviser.


To answer the question above - I think that this is why people find this stuff hard to understand.


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## smiley

room305 said:


> Actually if you make a loss on one fund and a gain on another you cannot offset one against the other.


 
bloody hell...now i dont like the sound of that....that is a massive disadvantage!


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## allo

room305 said:


> Be sure to make yourself familiar with the associated tax issues for all funds except the Oppenheimer ones. If you do a search for related threads you will get some info.
> 
> Personally, I found the taxation issues to be such a pain that I discontinued my investment with the funds.


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## allo

thanks all for advise , the tax issue seems to be a nightmare, but tax apart, as previously stated I am about 1000 euros ahead and I have zero knowledge on when to sell, should I toss a coin or hold on for a specific time?
.


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## beetlebum

allo said:


> thanks all for advise , the tax issue seems to be a nightmare, but tax apart, as previously stated I am about 1000 euros ahead and I have zero knowledge on when to sell, should I toss a coin or hold on for a specific time?
> .



If the lads knew that they wouldn't be here, they would be off in the Caribbean in a hammock, sipping Pina Coladas being served by girls in white bikinis!!!

On a serious note, what you want to do is time the market and that is impossible, you can make calculated educated guesses,  but they are just a guess.

my advice is sell when you want the money for something else.

hope this helps, and please excuse the cheekiness at the start
[FONT=&quot][/FONT]


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## room305

allo said:


> thanks all for advise , the tax issue seems to be a nightmare, but tax apart, as previously stated I am about 1000 euros ahead and I have zero knowledge on when to sell, should I toss a coin or hold on for a specific time?
> .



Nobody can advise you on that I'm afraid because it amounts to trying to predict whether the fund you are invested in will increase or decrease. Crystal ball stuff.


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## GreatDane

Hummmm, 

While Rabodirect may be offering some attractive rates & a decent overall online service, this tax hastle is going to scare lots of potential customers away, imho.

They may be the "straight talking bank" but I really wish they would also help us out here, by deducting the tax & forward to the Revenue for us - I'd even accept a small annual charge for having this done, were I investing in their funds etc.

With the introduction of this new tax calculator, why won't Rabodirect help us out here ? (come on Rabodirect, we know your' reading this, please answer the question ... or better yet, help us all out here )

- Top marks to Rabodirect for being open and willing to post here btw.  Any company / individual service provider willing to respond to questions & in particular, complaints via AAM deserves acknowledgement.

Cheers

G>


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## RaboDirect

We understand that some potential investors have difficulties with the tax situation. Customers can currently download their full transaction history which details each trade and the gain or loss made. The profit & loss calculator that we will develop in the coming months will help even further and should make life a lot easier. 

We appreciate that some customers would prefer if we automatically made deductions and forward them on to the Revenue. There are reasons why we cannot currently do this - see the RaboDirect post. However, we are listening and will endeavour to come up with a solution that meets our customers needs. Each investor's tax situation is different depending on the range of investments held - in other words, tax can sometimes be somewhat more complicated than we would wish. 

Thanks for the feedback. We'll keep AAM and our customers posted on developments. 

As an aside, a post on AAM some time ago suggested that we allow our customers choose our "Fund of the Month". This week we polled customers who subscribe to our ezine and asked them to vote from a selection of 4 funds. By popular vote the Henderson Pan European Equities fund was the winner and will be the Fund of the Month for Feb. Thanks to AAM for the suggestion. 

Regards,
RaboDirect


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## room305

RaboDirect said:


> We understand that some potential investors have difficulties with the tax situation. Customers can currently download their full transaction history which details each trade and the gain or loss made. The profit & loss calculator that we will develop in the coming months will help even further and should make life a lot easier.



It's not that calculating the tax  is too difficult, it is just that it as Clubman mentioned, it removes the chief benefit of going down the fund investment route. Given that the administrative burden on myself is the same - why would I not invest in ETFs through an online broker and thus avail of much lower fees?

However, perhaps the most serious problem (for me at least) is the way that the funds are structured. Namely that they must be treated separately for tax purposes. This discourages longterm investment because it means I cannot rebalance a diversified portfolio at the end of each year without incurring taxes even if I have made a net loss for the year.

This is a shame because Rabo has by far and away the greatest selection of funds to choose from. Full credit too for posting on the forum and answering people's questions.


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## ph4t

room305 said:


> Given that the administrative burden on myself is the same - why would I not invest in ETFs through an online broker and thus avail of much lower fees?


 
Aren't the Rabo funds all actively managed, unlike ETFs?


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## ClubMan

Last time I looked [broken link removed] seemed to be passively managed or trackers etc.


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## room305

ph4t said:


> Aren't the Rabo funds all actively managed, unlike ETFs?



True but there plenty of offshore and online brokers for the funds Rabo offer as well and the same argument still applies.


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## RaboDirect

RaboDirect currently only offers *actively* managed investment funds. We do not offer ETF's or tracker funds. When comparing the array of investment instruments investors need to be aware of the differences between them - sounds simplistic but often some potential investors do not appreciate the differences between index funds and actively managed funds. 

Please see for more information specifically regarding the asset classes on offer at RaboDirect 
[broken link removed]

Also, from the FAQ section of the RaboDirect site re investment queries
[broken link removed]

Re specific issues regarding taxation please see the above RaboDirect post. 

Regards,
RaboDirect


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## daz

Hi Rabodirect,

Quick question for you.

I currently have an investment fund opened online with you. I now wish to add additional monies to this fund. 

Will I be charged another entry fee of .75% on these monies even though the fund is already opened?

If I decided to place the new monies if a different fund will I then be charged a seperate .75% entry fee?

If I choose a regular contribution to the already opened fund what charges if any will apply..

Thanks


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## RaboDirect

daz said:


> Hi Rabodirect,
> 
> Quick question for you.
> 
> I currently have an investment fund opened online with you. I now wish to add additional monies to this fund.
> 
> Will I be charged another entry fee of .75% on these monies even though the fund is already opened?
> 
> If I decided to place the new monies if a different fund will I then be charged a seperate .75% entry fee?
> 
> If I choose a regular contribution to the already opened fund what charges if any will apply..
> 
> Thanks


 

Every time you purchase units in a fund you will be charged the entry fee of 0.75% (unless you have chosen the "Fund of the Month" where the entry fee is 0.25%). 
For example:
Feb 6: purchase €100 in Fund X: Charge is 0.75% 
Feb 21: purchase another €100 in Fund X: charge is 0.75% 
Feb 26: purchase €100 in Fund Z: charge is 0.75%. 

So as you can see, this applies to one off or regular transactions. 
Rabo Regular Investor Plan: 
Example: investing €100 in 3 funds every month:
Fund A: €100 - charged @ 0.75%
Fund B: €100 - charged @ 0.75%
Fund C: €100 - charged @ 0.75%

You can alter your Regular Investor Plan online at any time, ie, add or delete funds, change amounts, change frequency of investing. 

Note: an exit fee of 0.75% is charged each time you sell units in your fund(s). 

Fees: [broken link removed]

Past performance is a not a reliable guide to future performance. The value of your investment may go down as well as up. 

I hope this clarifies your questions. 

Regards,
RaboDirect


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## daz

This clarifies the situation.

Thanks.


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## huwi

Does anybody know whether *purchases* of Rabodirect funds need to be declared to the revenue? I started purchasing some of the funds last year and plan to hold on to them for the medium to long term. Obviously you have to declare any profits made on sales of your funds, but I am not clear on whether you also have to declare the purchases of these funds.

Also, the Rabodirect website investment faq says:



> Investors should note that the 23%* tax rate only applies if they have declared the tax liability to the Revenue Commissioner within a specified time period; otherwise, for investors who do not make valid returns within the correct period,  the tax rate applicable may be each investor's marginal rate of tax (which could be up to 41%*)



Does anybody know what is meant by this? How can you have different tax rates applying depending on whether you declared something inside a specified period? Surely if you aren't making a declaration in the specified time period, you are evading tax anyway. What has this to do with which tax rate is applied? 

Thanks for any info


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## room305

huwi said:


> Does anybody know what is meant by this? How can you have different tax rates applying depending on whether you declared something inside a specified period? Surely if you aren't making a declaration in the specified time period, you are evading tax anyway. What has this to do with which tax rate is applied?



I doubt purchases have to be declared and I don't know what form you could use if you did intend on doing so. Maybe this refers to the 8 year time frame alluded to in the 2006 Finance Act? Could be clearer though.


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## Dinnoc

I have a question regarding the tax rates. As some of the funds are resided in Luxembourg does that mean I have to pay 40% CGT rate as they are an offshore fund? Or does the 23% roll up rate apply to all Rabo direct funds.


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## smiley

as far as i am aware 23% applies


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## RaboDirect

Dinnoc said:


> I have a question regarding the tax rates. As some of the funds are resided in Luxembourg does that mean I have to pay 40% CGT rate as they are an offshore fund? Or does the 23% roll up rate apply to all Rabo direct funds.



RaboDirect offers investors capital growth investment funds (as opposed to distrubtion funds). Growth investment funds reinvest any income earned back into the fund.  

Any gains made from the buying and selling of units in RaboDirect's funds are taxed on a gross-roll up basis.  This means that the funds grow free of tax until the investor decides to sell their investment.  When an investor sells their investment the investor is liable to pay 23% (standard tax rate of 20% +3 %) on the total increase in value of the investment. 

Also on each eighth anniversary of acquisition the investor is deemed to dispose and reacquire their investment in the fund. 

Tax is payable at 23% on any deemed gain arising. This tax is available for credit against the tax liability when the investment in this fund is ultimately disposed of. If the investment has not increased in value, then no tax is taken.

Investors should note that the 23% tax rate only applies if they have declared the tax liability to the Revenue Commissioner within a specified time period; otherwise, for investors who do not make valid returns within the correct period,  the tax rate applicable may be each investor's marginal rate of tax (which could be up to 41%). In other words, it's in your interests to make prompt and correct tax returns. 

Investors should make the return on or before the 31st October in the year following the tax year in which they sold their RaboDirect investment fund.  For example, if a RaboDirect customer sold an investment fund in 2006 and made a gain, then the investor should submit this on his / her tax form on or before the 31st October 2007. The relevant revenue forms can be found on www.revenue.ie 

RaboDirect customers who have funds can download a statement which clearly details all transactions, the entry and exit fees applied and the profit or loss made on each sale. This information can then be used to make your tax return. 

Regards,
RaboDirect


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## GreatDane

Hi RaboDirect,

Clearly, this entire tax issue a problem for all concerned and will, if it does not already, seriously restrict your ability to grow new business for these various Investment funds.   Surely, Revenue & RaboDirect can come up with some solution to help make your customers & potential customers lives easier ?


On a seperate note, am I correct in thinking RaboBank is a mutual society owned by it's members & are customers of RaboDirect members of the mutual, entitled to voting rights etc ?

Thanks

G>


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## ClubMan

Garrettod said:


> On a seperate note, am I correct in thinking RaboBank is a mutual society owned by it's members & are customers of RaboDirect members of the mutual, entitled to voting rights etc ?


Not all customers of other mutuals (e.g. _EBS, FNBS_) are necessarily members as it depends on the type of account they hold for example. I am a _RaboDirect _customer and I certainly don't think that I'm a member.


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## GreatDane

ClubMan said:


> Not all customers of other mutuals (e.g. _EBS, FNBS_) are necessarily members as it depends on the type of account they hold for example. I am a _RaboDirect _customer and I certainly don't think that I'm a member.


 

I agree entirely, hence the question directed to RaboDirect here on the thread - I don't want to take the thread way off topic form general RaboDirect facilities etc, so just want a quick answer if possible from the contributor(s) posting under the handle RaboDirect please 

Regards

G>


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## RaboDirect

Garrettod said:


> I agree entirely, hence the question directed to RaboDirect here on the thread - I don't want to take the thread way off topic form general RaboDirect facilities etc, so just want a quick answer if possible from the contributor(s) posting under the handle RaboDirect please
> 
> Regards
> 
> G>



The Rabobank Group comprises 218 independent local cooperative Rabobanks in the Netherlands plus their central organisation Rabobank Nederland and its subsidiaries. Rabobank serves more than 9 million private individuals and corporate clients in the Netherlands and a growing number abroad. It employs over 50,000 staff and is represented in 38 countries.

The local Rabobanks and their clients form Rabobank Group's core cooperative business. The banks are members and shareholders of the supralocal cooperative organisation, Rabobank Nederland, which advises the banks and supports their local services. Rabobank Nederland also supervises, on behalf of the Dutch central bank, the solvency, liquidity and administrative organisation of the local Rabobanks. Rabobank Nederland further acts as an (international) wholesale bank and as a bankers' bank to the Group and is the holding company of a large number of specialised subsidiaries.

in short, RaboDirect is part of the Rabobank International Dublin Branch located in Dublin's IFSC. Rabobank International is owned by Rabobank Nederland and has a AAA rating. RaboDirect customers do not have voting rights or member shares in the Rabobank Group. 

For more information regarding the history, structure and profile of the Rabobank Group please see:
[broken link removed]
[broken link removed]

All the best,
RaboDirect


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## shipibo

Are RABOBank account holders members, and RABODIRECT A/C Holders not ??


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## TheBigLebows

RaboDirect said:


> Please see the following link regarding the tax treatment of ALL RaboDirect funds. [broken link removed]
> 
> You are able to download statements which detail the profit and loss on each fund transaction. To make life easier for our customers we will be developing a calculator that will make it very simple for you to determine your profit (or loss) each year. For example, if you made three transactions in the same fund in one year you will have bought them at different prices. The calculator will do the hard work for you in determining the overall profit. We will release this calculator in our secure site in the coming months.
> 
> Regards,
> RaboDirect


 
Any sign of this calculator we were promised?


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## RaboDirect

Latest update:
We investigated if we could actually deduct tax for investors directly. The taxation advice we received is that we cannot do this. Investors in offshore UCITS funds must make their own tax declarations. 

So this being the case, we will work on a calculator that we will make available in the Secure Site. This will make it very clear what your profit and loss is during the relevant period. Naturally this requires system development work and needs to be thoroughly tested etc but we have made the commitment to deliver it and will do this before autumn. 

Please note that statements are currently available in the secure site which clearly detail each trade, the price and gain or loss. However, an automated calculator would certaintly make life a lot easier.

RaboDirect


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## room305

RaboDirect said:


> Latest update:
> We investigated if we could actually deduct tax for investors directly. The taxation advice we received is that we cannot do this. Investors in offshore UCITS funds must make their own tax declarations.
> 
> So this being the case, we will work on a calculator that we will make available in the Secure Site. This will make it very clear what your profit and loss is during the relevant period. Naturally this requires system development work and needs to be thoroughly tested etc but we have made the commitment to deliver it and will do this before autumn.
> 
> Please note that statements are currently available in the secure site which clearly detail each trade, the price and gain or loss. However, an automated calculator would certaintly make life a lot easier.
> 
> RaboDirect



Perhaps you could clarify whether funds are treated separately for tax purposes or not i.e. can a gain on one fund be offset against a loss on another fund?


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## GreatDane

Hi

Now that would be helpful, along with other questions some might consider obvious .... a good FAQ section to accompany the RaboDirect funds would be important to myself and probably many others I'd think.

Perhaps, if RaboDirect are designing this calculation they might also agree an appropriate document which the Revenue will accept & which might be printed off, after the calculator has finished doing the tots ?

Thanks

G>


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## galmeister

That was a good question room305. Did anyone clarify if gains on one fund can be offset by losses on another. 

If so, does it apply only to disposals within the same tax year or what are the parameters?


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## room305

galmeister said:


> That was a good question room305. Did anyone clarify if gains on one fund can be offset by losses on another.



Never been clarified as far as I can tell. My brother's professional opinion is that they cannot be. It's a shame because although they have high charges, Rabo do  have the best range of funds available. However, I don't fancy getting hit with a tax bill every year simply for rebalancing my portfolio, so I've kept away from the funds.


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## GreatDane

room305 said:


> Never been clarified as far as I can tell. My brother's professional opinion is that they cannot be. It's a shame because although they have high charges, Rabo do have the best range of funds available. However, I don't fancy getting hit with a tax bill every year simply for rebalancing my portfolio, so I've kept away from the funds.


 

Oh No,

If thats the case .... it could be a problem for many investors / potential investors.

This is the kind of thing I'd love to see RaboDirect respond to - both here and also, cover out on their FAQ's on their website.

Regards

G>


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## greentree

Could someone explain the additonal 3% on top of the CGT rate of 20%?

Any revenue documentation I can find just states that the CGT rate is 20%

Thanks!


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## BRICKTOP

room305 said:


> Never been clarified as far as I can tell. My brother's professional opinion is that they cannot be. It's a shame because although they have high charges, Rabo do have the best range of funds available. However, I don't fancy getting hit with a tax bill every year simply for rebalancing my portfolio, so I've kept away from the funds.


Unless you are rebalancing within an umbrella fund any "rebalancing" would give rise to CGT anyway.


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## CCOVICH

greentree said:


> Could someone explain the additonal 3% on top of the CGT rate of 20%?
> 
> Any revenue documentation I can find just states that the CGT rate is 20%
> 
> Thanks!


 

It is not CGT, it is exit tax.  If you search for 'exit tax' on AAM you will find plenty of explanation.


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## room305

BRICKTOP said:


> Unless you are rebalancing within an umbrella fund any "rebalancing" would give rise to CGT anyway.



Many other fund providers do facilitate just such an umbrella. With Rabo you can only cash out and re-invest giving rise to a possible exit tax liability even for a year in which you realised a loss overall (it's not CGT btw).

With ordinary shares, you have a CGT threshold to work under and you can offset the gains on some shares against losses on others.


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## greentree

CCOVICH said:


> It is not CGT, it is exit tax.  If you search for 'exit tax' on AAM you will find plenty of explanation.



Sorry - bit of a newbie in the tax area.

I have a share portfolio and am thinking of getting into funds.

So when you sell shares you pay CGT and when you exit a fund you pay this exit tax of 23%. Is that correct?

Thanks


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## z108

Can you not switch between funds in Rabo (like in every other product I can think of) without exposing yourself to tax ?


Greentree, how I think of the exit tax is that it  applies to the dividends + capital gains. So its  a tax on both the capital gain and also on the income created in the funds' investments.


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## CCOVICH

greentree said:


> Sorry - bit of a newbie in the tax area.
> 
> I have a share portfolio and am thinking of getting into funds.
> 
> So when you sell shares you pay CGT and when you exit a fund you pay this exit tax of 23%. Is that correct?
> 
> Thanks


 
Pretty much, yes.


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## BRICKTOP

sign said:


> Can you not switch between funds in Rabo (like in every other product I can think of) without exposing yourself to tax ?


 
No, unless they are within an umbrella fund.


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## BRICKTOP

room305 said:


> Many other fund providers do facilitate just such an umbrella. With Rabo you can only cash out and re-invest giving rise to a possible exit tax liability even for a year in which you realised a loss overall (it's not CGT btw).
> 
> With ordinary shares, you have a CGT threshold to work under and you can offset the gains on some shares against losses on others.


 


RB (due to economies of scale) provide low minimums, low cost access (in terms of front end load) to *multiple* top fund managers whom the ordinary Joe Bloggs would normally not have access to, therefore an umbrella is unrealistic.


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## z108

BRICKTOP said:


> No, unless they are within an umbrella fund.



I welcome Rabo into the Irish market but in that case I have no regrets about *NOT* taking up their  May no entry fee commission offer.  It seems ludicrous not to be allowed to change funds without paying tax or new charges. Normally thats one of the best options to someone who thinks he wants to consolidate his gains and move from for example shares to a bonds/cash fund.
 Why cant they put some kind of wrapper around the Irish portion of the fund ? There must be a legal way.


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## BRICKTOP

sign said:


> I welcome Rabo into the Irish market but in that case I have no regrets about *NOT* taking up their May no entry fee commission offer. It seems ludicrous not to be allowed to change funds without paying tax or new charges. Normally thats one of the best options to someone who thinks he wants to consolidate his gains and move from for example shares to a bonds/cash fund.
> Why cant they put some kind of wrapper around the Irish portion of the fund ? There must be a legal way.


 
Just curious, do you know any other providers who do this?


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## z108

BRICKTOP said:


> Just curious, do you know any other providers who do this?




In fact I've never heard of this happening before.
If you're directing the question to me...Maybe there is a misunderstanding because the answer is so obvious ? 

But of course I know . Walk into any bank or insurance company and you can switch between funds within the one product witout being hit by a charge.
The prime answer as far as I'm concerned is Quinn Life or if youre tired of hearing about QL then even Eagle Star purchased through a flat fee broker.

With Quinn, If I want to get out of my Chinese fund and into a safer bond fund or I feel I want to invest in a Euro fund instead move to that, in which case I dont have to pay an extra entry or exit charge on the fund to do so.


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## BRICKTOP

Never realised that about QL, will have another look, and have my pension through ES so need to diversify from them.


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## z108

BRICKTOP said:


> Never realised that about QL, will have another look, and have my pension through ES so need to diversify from them.



OK cool . I assumed you'd be aware of that as you have almost 100 posts


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## BRICKTOP

Quote "But of course I know . Walk into any bank or insurance company and you can switch between funds within the one product witout being hit by a charge."

Sorry just coming back on this, think I am causing some confusion. When you say "charge" do you mean a commission (to provider) or do you mean an exit tax (i.e. 23% to Revenue)? I am well aware other providers allow free switches but am unsure when you switch from one fund to another whether this will trigger the exit tax on the way out (other than in your pension funds), which was my question? Thks


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## Bronte

I'm amazed at the amount of people that want low fees from Rabo and also want them to do their tax calculations for them.  I don't invest in shares/funds etc as I find the area too complicated and I'm not the only one.  Personally those who are investing in such things you'd imagine if they were able to do this should also be able to do the tax calculation which seems to be as complicated as investing. 

Separately I think the Revenue should make it easier to calculate the tax, isn't that their job? To help the customer - Us. Do they not have a calculator to do this.  How do they know if someone submits a return on Form 12 with their gains/losses and 'exit tax' (as versus Capital Gains Tax) that's it's correct.  Doesn't somebody in the revenue have to go through the figures?


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## TicTacToe

Just to clarify, (first time poster!)

Am I correct in assuming that Quinn Life calculate and deduct relevant taxes and forward them on to revenue?

Also they dont charge any extra to switch between funds?

I am in the position to start investing approx 250 Euro per week. I was going to open a Rabo account and perhaps an AIB regular saver account but with all the tax issues I am reluctant to open the Rabo account.


I take it that Quinn Life is easier to invest in but Rabo has a wider range of funds?


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## CCOVICH

Quinn look after all tax aspects (legal obligation-not customer service).

They allow a certain number of switches per year without charging.

There are no tax 'issues' with the Rabo Savings products-DIRT is deducted and paid over same as any other bank.

Rabo offer a wider range of a different type of fund.


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## room305

Aileen2 said:


> I'm amazed at the amount of people that want low fees from Rabo and also want them to do their tax calculations for them.



I don't think it's an unreasonable demand given that QL have lower fees and take care of taxes for their customers. Rabo have a better range of funds and they are actively managed rather than passively managed but the tax situation is a nightmare for a product supposedly aimed at making investing simple.


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## z108

BRICKTOP said:


> Sorry just coming back on this, think I am causing some confusion. When you say "charge" do you mean a commission (to provider) or do you mean an exit tax (i.e. 23% to Revenue)? I am well aware other providers allow free switches but am unsure when you switch from one fund to another whether this will trigger the exit tax on the way out (other than in your pension funds), which was my question? Thks



I'm saying that the ability to switch/trade between funds inside the one product without incurring fees or taxes is very important to me and it appears this doesnt happen with Rabobank, I'm sad to say.
Quinn Life charge a flat fee for more than 3 switches which Im unhappy about too but it appears I wont get hit by exit tax or exit fees from Quinn for switching funds  but will for Rabo. Im as confused as you by now bricktop lol


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