Selling and rebuying an ETF which has no profit or loss to reset the 8 years' deemed disposal

T

theObserver

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I am considering selling then immediately rebuying my positions in two ETFs to reset the deemed disposal if the decline continutes.

These were the first ETF positions I took when I started investing and, back then, I never kept any records. Selling/rebuying would tidy up my financial records and reset the DD clock. My question: is there a disadvantage to doing this aside from the P/L? I know we cannt offset one ETF against another but selling/rebuying the same fund is legal AFIK.
 
Yes, there is nothing wrong with that.

I suppose you are realising a loss and resetting your cost. But what's the point?

Future profits will be higher as the cost will be lower than the original cost
 
It tidies up my financial records, espeically the early years when I never kept any, and the money can hopefully grow and compound uninterrupped for another eight years which brings me up to my potential retirement date.
 
theObserver said:
My question: is there a disadvantage to doing this aside from the P/L?
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Having to pay charges to sell and rebuy?
You'll have to pay exit tax on any gain now?
If you have no records then isn't it going to be difficult to work out why gain and any tax liability now?
 
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There's no charges attached to selling/buying. Trading212 will tell me the realized P/L when i sell. Another 30 days like the last and there won't be any gains to pay tax on !
 
Are you approaching the 8 years?
You have two ETFs.
Are they both in losses?

This is my understanding of it:


If they are at a loss now, if you hold onto them, you "carry the loss forward". If you sell them then you lose the loss.

If they are in profit, and you hold onto them, you can set any future loss in that ETF back against the profit already.
 
Corola said:
There is always a cost when selling/buying due to the spread. The difference between the bid and ask price means you will pay more to rebuy the same number of shares than you sold them for.
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That's a point I never considered. Thank you for bringing it up! I guess the spread is per share rather than per order?
 
We know that the deemed disposal is only for some ETF and not all. I heard from a financial advisor that ETFs domiciled in the US, EEA & other OECD countries use the shares tax treatment and not the deemed disposal tax. Thoughts on this?
 
Finance said:
Thoughts on this?
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I don't think it's as simple as that.

Using a US Broker to buy ETFs like SPY, IVV, or VOO - does this avoid deemed disposal?

As the title states - if using a US broker (e.g. Tastytrade - formally Tastyworks) to buy US based ETFs, does deemed disposal still apply to me or not? Yes I can buy/sell these via Tastytrade. Have a decently sized account and have been thinking about putting a portion into some of the SPY...
www.askaboutmoney.com
You'd have to get out the prospectus of the ETF and examine the legal structure of the fund to determine if offshore fund rules or general tax principles apply.
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Surely a consultation with a tax consultant would clear that up? Would you have some kind of surety with their professional advice?
 
Finance said:
Surely a consultation with a tax consultant would clear that up? Would you have some kind of surety with their professional advice?
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If revenue themselves can't give a straight answer then, while helpful, a tax consultant will not be able to give surety.

But you are correct ETC ETN and ETP structures are not taxed under exit tax. So for example ishares physical gold ETC is taxed under CGT
 
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