Investing in US-ETFs as an Irish expat?

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nualapc

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Hello

I have a sum of money that I'm looking to put into a low-risk ETF for at least 10 years. I was born in the US, but moved to Ireland when I was 10 months old and have been here since. My mother was Irish so I am a dual citizen. This puts me in a really confusing position investment and tax-wise.

I know that if I invest in US ETFs I am probably subject to DD and will be taxed 41% of gains every 8 years - not very attractive. But it seems more unattractive for me to invest in EU ETFs as a US citizen due to all the UCITS/PRIIPS/KIDs implications. I'm a brand new investor and am trying to navigate this and it seems like the only option I really have is to invest in individual stocks - which I don't want to do.

Would really appreciate any guidance on this!
 
nualapc said:
But it seems more unattractive for me to invest in EU ETFs as a US citizen due to all the UCITS/PRIIPS/KIDs implications.
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Can you clarify what you mean by this?

Why not consider investing in a diversified basket of shares - or even just one or two already diversified conglomerate shares like Berkshire Hathaway or one on the several "baby Berkshire Hathaways" that are available? Shares like these are arguably a proxy alternative to ETFs/index trackers given their diversification.
 
If you are a US citizen living in Ireland you need specialist advice for us ex pats as you are subject to filing obligations with the IRS and FATCA/ PFIC issues if you attempt to purchase European investments

Your best place to get advice is

Wealth Management US Expats | Landing Page

Creative Planning International provides comprehensive, customized investment management and financial planning solutions for Americans abroad. #1 Ranking Ranked #1 on RIA Channel’s list of the Top 100 Wealth Managers (2020)* Over $210 Billion Combined assets under management and advisement as...
creativeplanning.com
 
Marc said:
If you are a US citizen living in Ireland you need specialist advice for us ex pats as you are subject to filing obligations with the IRS and FATCA/ PFIC issues if you attempt to purchase European investments

Your best place to get advice is
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Thanks for the link!

Yeah I was going to stay away from EU domiciled funds due to FATCA/PFIC. I also can't invest in US mutual funds due to EU regulations. I have a Schwab International account that will allow me to invest in US ETFs and individual stocks, but I'm worried about US ETFs due to DD and buying individual stocks and creating my own portfolio feels risky and daunting as a new investor. I was looking at BRK-B as I think they're treated as individual shares rather than funds in the Irish taxation system.

I think the only options are trade US ETFs and just accept DD or hope its gotten rid of in 8 years, buy individual stocks and create my own portfolio and deal with the risk that comes with that, or hire a financial planner who can trade US mutual funds on my behalf.
 
DD = deemed distribution

Many US ETFs are correctly categorised under general tax principles not exit tax.

We share our analysis with Creative so you can confidently invest as a US citizen and not fall foul of Irish specific issues
 
Marc said:
DD = deemed distribution

Many US ETFs are correctly categorised under general tax principles not exit tax.

We share our analysis with Creative so you can confidently invest as a US citizen and not fall foul of Irish specific issues
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So I can invest in specific US ETFs that are categorised under general tax principles and not be taxed 41% every 8 years?

I went to creative but they said it's not worth financial advice right now!
 
nualapc said:
So I can invest in specific US ETFs that are categorised under general tax principles and not be taxed 41% every 8 years?

I went to creative but they said it's not worth financial advice right now!
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Common problem. Extremely high complexity combined with low investment amount.

We could provide a fixed fee consultation to help you DIY appropriately or you could work around it using an Irish pension for long term investments and cash for short term savings
 
Hey @nualapc - did you ever get any further with this? I am in the exact same position. I have current + savings accounts on Wise with a US phone number, and an account on Robin Hood which I invest in.

I'm really not sure on the tax implications and all these expat consultation firms are more focused on actual high earners.
 
Hi @jmd42069

I haven't worked it out yet. I think either:

1) Invest in conglomerate companies like Berkshire Hathaway

2) Invest in closed-end mutual funds (not confirmed this is okay but I think it would be)

3) Invest in US ETFs and just hope that in 8 years deemed disposal isn't as bad, or just pay 41% tax on earnings that I wouldn't even have if I keep my money where it is right now
 
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