Key Post Summary of Stock Market Investment Costs

PMU said:
I doubt this is correct. Your gain (or loss) is the change in value of the share plus the change in the exchange rates. If you paid for your shares in euro, the increase in value of sterling vs the euro will increase your returns in euro terms.

For example, if you bought a share at say 5.68 GBP this time last year and today the share is now worth 6.56 GBP, you have a gain of 15% in GBP terms. But as you paid for the share in euro, last year you paid 6.9889 EUR for the share at the prevailing GBP/EUR exchange rate.
In the past year sterling has increased in value relative to the euro. If you sold today you would get 8.9932 EUR for the share at the current GBP/EUR exchange rate.
As the euro has decreased in value relative to sterling your gain in euro terms is 28%. So you are getting a double gain, one from the increase in the value of the share and one from the increase in value of the currency in which the share is denominated relative to the euro.
Click to expand...

No I recently purchased shares in Tullow via TD at a client settlement currency rate of 0.69559, rate when sold was 0.745 therefore even though the share price has risen, the gain has been lost on the exchange rate.
 
The main point is that this currency swing of 28% can easily go the other way. Not many stocks will outperform that
 
Summary of Stockmarket costs table at the start of this thread has been updated (Investment trusts are generally charged a stamp duty of 0.5%...Occasionally there is no charge, so check with your stockbroker.....thanks Sarenco)
 
Table updated with information from Revenue on how/when you pay your 41% tax on EU domiciled (UCITS) ETFs, also with information on dividend withholding tax.
Still hoping someone has the answer to whether you get a credit/refund on US Dividend witholding tax???
 
Table updated with a reminder of the benefit (for shares or US domiciled ETFs) that the first 1,270 Euro of any capital gain is tax free, However there is no tax free threshold from any gain from EU (UCITS) ETFs.....
thanks Clubman (from another post).
So profit from shares or US domiciled ETFs could effectively allow a small tax free income every year, by selling a quantity of shares that keeps you within the 1,270 Euro threshold.
 
Hi Landlord

It is not correct to say that dividends paid by UK companies are subject to a 10% withholding tax. In fact, no tax is withheld on UK dividends but a tax credit system currently applies (which is of no benefit to non-UK tax residents). As an aside, the UK Chancellor announced last week that the tax credit system is going to be abolished next year but this will have no impact on Irish resident investors.

The bottom line is that Irish residents receive dividends from UK companies on a gross basis, with no withholding.

Also, the withholding tax on US securities is reduced from 30% to 15% (not 20%).
 
Sarenco said:
Hi Landlord

It is not correct to say that dividends paid by UK companies are subject to a 10% withholding tax. In fact, no tax is withheld on UK dividends but a tax credit system currently applies (which is of no benefit to non-UK tax residents). As an aside, the UK Chancellor announced last week that the tax credit system is going to be abolished next year but this will have no impact on Irish resident investors.

The bottom line is that Irish residents receive dividends from UK companies on a gross basis, with no withholding.

Also, the withholding tax on US securities is reduced from 30% to 15% (not 20%).
Click to expand...

Thanks Sarenco....
My information regarding UK dividend withholding tax comes from this recent post...apologies if I have miss understood it.
http://www.askaboutmoney.com/threads/the-taxation-of-uk-dividends.172787/#post-1435326
Brendan and others seemed to suggest in that post that there was a 10% DWT in the UK with no refund or credit? perhaps you could comment on that post with the correct information.

Regarding the the 20% DWT from US securities, this information came from a phone call with someone in TD Waterhouse. Could they potentially have confused me with someone living in the UK? Would that make a difference? Either way i am sure you are correct!! thanks....
 
landlord said:
Thanks Sarenco....
My information regarding UK dividend withholding tax comes from this recent post...apologies if I have miss understood it.
http://www.askaboutmoney.com/threads/the-taxation-of-uk-dividends.172787/#post-1435326
Brendan and others seemed to suggest in that post that there was a 10% DWT in the UK with no refund or credit? perhaps you could comment on that post with the correct information.

Regarding the the 20% DWT from US securities, this information came from a phone call with someone in TD Waterhouse. Could they potentially have confused me with someone living in the UK? Would that make a difference? Either way i am sure you are correct!! thanks....
Click to expand...

Hi Landlord

The UK is somewhat unusual in not having a withholding tax on dividends paid to non-residents - I'm afraid I can't explain why Brendan and others are suggesting otherwise.

Irish tax residents do not benefit from the (soon to be abolished) tax credit that is available to UK tax residents but that is not the same thing as saying that a DWT applies in respect of UK dividend payments.

The withholding tax rate on distributions from US securities is 30%, which can be reduced to 15% on completion of a W-8BEN - I don't know where the 20% rate is coming from. As far as I know, Irish and UK tax residents are in the same position in this regard.

 
landlord said:
You're absolutely right the last few days I've been re-doing the table at the start of this thread accounting for approximate currency conversion costs for shares or ETFs denominated in other countries currencies.
I am guessing very roughly .5% conversion cost for a cheap online conversion company?
Click to expand...

So am i right in thinking that if I was to invest 1000 EUR monthly into an ETF domiciled in the US such as Vanguard VOO, I would have to pay 2 fees to my broker each month:
1. The brokers transaction cost.
2. The conversion cost to convert 1000 EUR to USD?
 
Cian McCann said:
So am i right in thinking that if I was to invest 1000 EUR monthly into an ETF domiciled in the US such as Vanguard VOO, I would have to pay 2 fees to my broker each month:
1. The brokers transaction cost.
2. The conversion cost to convert 1000 EUR to USD?
Click to expand...

In the end I used my broker "Degiro" to convert my money (instead of an external conversion company) as the rates were very good.
To buy a US ETF like VOO will cost per transaction.......

https://www.degiro.ie/data/pdf/ie/IE_Feeschedule.pdf

2 euro + 0.02% transaction charge and
0.1% currency conversion (which is done automatically when you purchase in Euros). n.b. This is incredibly cheap!!!!!
 
You must log in or register to reply here.
Back
Top