I'm trying to find on revenue where it says investment trusts are treated like shares for CGT and loss relief can't find it anywhere , i know most here say they are treated like shares but would like to find it in writing before diving in again and realising that Revenue haven't clear guidance on this and they will probably realease a note like they did for ETF''s and say they are gross roll-up , revenue site is a joke trying to navigate it.
Thanks Sarenco great advice as always , I've been reading a lot about trusts since yesterday I am surprised that they outperform ETF's , I've 10k in my Saxo account going into a trust now ,i'm going to slowly sell my ETF's and buy trusts.
Hi Fella
ITs are shares like any other and there has never been any real ambiguity as to how they should be treated for tax purposes in Ireland. They are not subject to the funds tax regime because, well, they're not funds
There is actually plenty of ambiguity, and there are plenty of advisors who contend that they are funds.
Revenue's view is that some investment trusts are funds, but it is only their view.
Investment trusts typically are not funds because they are not regulated in the same manner as (say) a UCITs structure and because they are closed ended (i.e. new units are not created, the trust generally does not redeem investors' shares and in order for shares to be sold, a willing buyer must be found).
ISEQ Overall Index
25 November 2011: 2,521
Today: 6,153
Increase: 144%
I wonder if you have missed the boat?
Stop messing with complicated spreadbetting and projections which are fairly meaningless.
Just start buying shares.
Brendan
Sarenco
I have met with Revenue to discuss this issue and done significant work in this area. Aberdeen Asian Income is just one example of an investment trust which should probably be treated like a fund for tax purposes. It is most definitely a complex area and far from clear. For example, I am aware of one Big 4 firm who were of the view that ALL investment trusts should be taxed as funds until recently.
Any good reading you'd recommend on these? Im still torn between accumulating UCITS ETFs and something that doesn't require the eight year deemed disposal rule. Buying non UCITS ETFs seems like hassle, so maybe trusts is the answer....
Are you referring to the Aberdeen Asian Income Fund Limited? That company is incorporated in Jersey and is regulated as a collective investment fund under the Collective Investment Funds (Jersey) Law 1988. Very difficult to argue that a company is not a fund when it is treated as such under the laws of its own domicile!
Would you care to name the Big 4 firm in question? I would be astonished if any Big 4 firm ever formed such an opinion but I can check this quite easily if you would care to name the firm.
Sarenco
The regulatory aspects of that fund are completely irrelevant in this context. The tests for "fund taxation" are "regulation" and "material interest" for collective investments in "good" jurisdictions. But for collective investments in "bad" jurisdictions (like Jersey), it's the "material interest" test only. Aberdeen Asian Income is subject to "fund taxation" because of the relationship between the market value of its shares and its overall NAV. The regulation that you refer to is meaningless in the context of Irish taxation.
It's hard to agree with your view that the Irish tax treatment of investment trusts is obvious and straightforward when you yourself seem to be confused by it!
Gordon
Well I currently have the MSCI world UCIT ETF thats accumulating , my intention was to sell this but I'm trying not to make impulsive decisions (for once!) Its a case of more money = more problems.
I bought all of my MSCI world at almost the same price so I think i'll sit on this for a while the loss relief won't be a major problem but i'm certainly not buying any more. The gross roll up and exit tax just doesn't work alongside dollar cost averaging in my opinion as you are likely to buy at times when it is over valued and at times when undervalued and when you sell you will be paying a sinful 41% tax on your gains without been able to deduct your losses first which should be illegal .
I'd say if you have a lump sum to invest and can pick one ETF thats accumulating and suits your needs then its perfect. Forget about it for 8 years.
I wanted to find on revenue site myself where it said investment trusts are taxed at x% but of course revenue would never make it that easy for someone to find. I'm guessing that because the investment trust is a share that it comes under shares taxation and there is no need to make a separate post about it , but i still think Revenue should make special reference to it to help novice investors like myself.
I just googled investement trusts and read about them on a few sites , Sarenco mentioned AIC website which is very good , I sorted the trusts by TER ( this may not be the best method ) as i want low cost , I then looked at that NAV discount or premium from little reading I've decided not to pay over 5% premium or to take a trust with an under 5% discount , I then just had a look at previous returns and charts to give myself and idea of volatility and had a look at the gearing of the trusts , the performance of the trust in comparison to similar trusts and the holdings , dividend yield etc. Googling investment trust portfolios brought up a few sample portfolios . There is good reading on trustnet .com and morningstar uk , I am shocked at how much these trusts outperform ETF's even without them been tax favourable had I read all this about trusts I would have went with trusts over ETF's , you can only buy them or they are mainly on the london stock exchange and in GBP which is the only downside but i suppose having have my net worth in another currency is some diversification in itself.
I'm just reading the posts above and there may still be some grey area of how trusts are taxed which is unfortunate I know Sarenco is fairly certain but this is where the lack of clear guidance from revenue leaves things open to interpretation , I am going to ring revenue today and see can I get a clear answer.
Fella just out of curiosity which provider did you go with for your world MSCI ETF. Was it I shares?
I was looking at a few funds that are accumulating earlier landlord , I like this FTSE tracker
http://www.fundslibrary.co.uk/funds...ss_doc_simplified_prospectus&user=hl_web_test
Legal and general class c its TER is only 0.06%
I seem to able to get the same TER same index trackers in investment trusts as I can in ETF's
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