Dan_The_Man
Registered User
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Hi ...question is in 2 parts, I'm looking for:
1. A recommendation on best place to buy and manage ETFs, by best I mean the balance between secure, cost, platform features etc.
2. Advice on allocating a lump sum to a range of ETFs that provides some growth in equities whilst providing some protection to the down side.
I'm willing to pay for advice, so if you have a recommendation on an adviser who could help with 1 and 2 above that's welcome too.
thanks
Presumably geared for UK investors (where there is simply income tax on dividends and CGT on disposals).The site provides tax reporting
Presumably geared for UK investors (where there is simply income tax on dividends and CGT on disposals).
I assume you are invested in UCITS ETFs. Given our tax code, you must be paying 41% exit tax on each dividend payment received and then re-investing the balance on a quarterly basis (starting a separate holding period for each (re)investment)? Similarly, every time you rebalance that also gives rise to a new disposal/acquisition for exit tax purposes.
That's going to be extremely difficult to track.
Here's a pretty good IT article on the taxation of ETFs.
Don’t invest in an ETF until you understand the tax
Exchange-traded funds may be less attractive than they appear due to onerous tax reporting requirementswww.irishtimes.com
Understood but you would need to track the date and amount of every single dividend payment/acquisition/disposal and then calculate the exit tax due (taking account of any deemed disposals) on an annual basis. That can't be easy.The tax reporting isn't UK based - it isn't a calculation of tax due, rather a reporting of income and capital gains / losses. The reporting of that (and the calculation of tax due) is via the revenue portal.
Understood but you would need to track the date and amount of every single dividend payment/acquisition/disposal and then calculate the exit tax due (taking account of any deemed disposals) on an annual basis. That can't be easy.
Would it not be more efficient from a tax perspective to invest in a single, accumulating global index tracker?The answer may be to decide to liquidate everything before the 8 year anniversary of opening the account and reset.
Would it not be more efficient from a tax perspective to invest in a single, accumulating global index tracker?
Ah, understood.The other relevant factor for me is that, due to my job, I would need to pre-approve any trades with my company - unless it is in a "hands off" vehicle. So again this suits
I use ETFMATIC - it is a robo advisor in that you do a standard risk assessment, it creates a suggested balance of equities vs bonds (you can adjust to make the balance whatever you want), you lodge cash - lump sum or regular investments - and it automatically manages the purchases (and rebalancing if required). It will also reinvest dividends back into the strategy. It's very straightforward and fees are as low as you'll get I believe
Whether the process gives you enough advice on question 2 - you'll have to try and see (you can do the assessment before sending any cash). Definitely make sure you fully understand the process and the ETF's they use before starting anything
ok thanks for that ..interesting:
Low cost - check
Makes recommendations - check (i mean i may still take advice but good to know)
I see the follow up concerns about Tax - thats ok I have someone to do my taxes for me
Do you know ....
How secure is ETFmatic? ..meaning if the platform/service itself runs into issues, what the access do you have to your funds?
How easy is to liquidate and transfer funds if needed?
They use Barclays for client money accounts and Saxo Capital Markets as custodian. Currently regulated by UK regulator, subject to UK/EU client asset protection rules and part of the UK investor protection scheme (though they have a European license to transfer to in case of Brexit). So pretty much the same protection framework as any EU regulated financial institution.
To liquidate - there is an option to either withdraw funds or close a portfolio completely. In either case the liquidation of positions occurs at the next dealing cycle - they deal with the ETF's weekly. Funds will be transferred after that - so a maximum of 7 days (they say) if you happen to liquidate just after their weekly dealing date.
One thing to note - if you are withdrawing funds, they need to have an authenticated bank account on file (this isn't done as part of opening the account). So if you felt you wanted to be sure any quick withdrawals go without a glitch, I would pre-emptively arrange to have an authorised account on file with them.
That's why I take the view that, in most cases, it makes no sense to invest outside a pension wrapper while carrying a mortgage.
Once the mortgage is paid off, one strategy is to maintain a high (perhaps even 100%) equity allocation in a (tax-advantaged) pension wrapper and to invest any after-tax savings in (tax-free) State savings products.
Sarenco. I havnt got involved in these discussions for several years, but previously you were recommending investment trusts instead of state savings (at least I think you were.....for someone whose pension was maxed out and paying a v v low tracker rate mortgage). Is that still the case?
If somebody has a paid for house and is maxing out their pension contributions, then investment trusts might well be a good home for their after tax savings.
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