I have decided to purchase USA domiciled ETF's via tastyworks, transferring the dollars via currencyfair. I'm aware the elephant in the room with this plan is the taxation treatment but I am personally satisfied that most USA ETF's are very likely still taxed under CGT. I'm happy to take the risk that I end up having to pay gross roll up tax instead as I don't think it would be the end of the world if this happened and I will be keeping it only a relatively small proportion of my portfolio. But one thing that is putting me off is how to determine which USA ETF's are taxed under CGT and which are much more uncertain.
My understanding is that part of the reason for revenue withdrawing its USA ETF taxation guidance relates to Brexit technicalities. However, I also wonder if part of it is because not all USA ETF's are actually the same. I didn't previously realise this myself but older ETF's which are still extremely popular such as SPY, QQQ were set up as "Unit Investment Trusts (UIT)". Now I am far from a tax or legal expert but even just the fact that they have the words unit and trusts in their names and prospectuses makes me nervous about them being treated as offshore funds under gross roll up! So does this mean they are potentially subject to gross roll up instead of CGT?
I appreciate this is quite a technical question. I suspect I could get professional advice from several tax advisors and end up with different answers. Perhaps someone can shed light on it though? Am I safer to stick with newer ETF's which are not UIT's, such as for example IVV, VTI or VOO?
I think I probably will opt for one of these newer ETF's even just on the precautionary principle but it would be good to get some clarity on it. It's completely crazy that this level of analysis etc is required to sensibly invest ones savings in this country but that's a seperate discussion.
My understanding is that part of the reason for revenue withdrawing its USA ETF taxation guidance relates to Brexit technicalities. However, I also wonder if part of it is because not all USA ETF's are actually the same. I didn't previously realise this myself but older ETF's which are still extremely popular such as SPY, QQQ were set up as "Unit Investment Trusts (UIT)". Now I am far from a tax or legal expert but even just the fact that they have the words unit and trusts in their names and prospectuses makes me nervous about them being treated as offshore funds under gross roll up! So does this mean they are potentially subject to gross roll up instead of CGT?
I appreciate this is quite a technical question. I suspect I could get professional advice from several tax advisors and end up with different answers. Perhaps someone can shed light on it though? Am I safer to stick with newer ETF's which are not UIT's, such as for example IVV, VTI or VOO?
I think I probably will opt for one of these newer ETF's even just on the precautionary principle but it would be good to get some clarity on it. It's completely crazy that this level of analysis etc is required to sensibly invest ones savings in this country but that's a seperate discussion.
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