Duke of Marmalade
Registered User
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- 4,686
I don't want to further mess up the Key Post. I think 3CC sums up the position well for most ETFs.
The more complicated question is this matter of what is a "good" or a "bad" ETF. A clear definition has been given so far as ETFs are concerned; essentially ETFs from tax havens are "bad" and all others are "good".
Now, as 3CC has pointed out, "bad" ETFs are in fact treated as material interests in an offshore fund and taxed at a super rate of 48% so these remain bad, or rather "ugly" in every sense of the word.
But the grey area, which interests me the most, are those collective investment vehicles which are constituted as fixed share companies (as opposed to open ended companies like ETFs), the most notable being UK Investment Trusts.
These are what I have been referring to as "bad" ETFs which is rather a misnomer as they are neither bad nor ETF
The tax treatment of these should be obvious i.e. taxed as ordinary shares (which is now a good thing compared to 41% exit tax on ETFs). However, Rory Gillen has suggested that it is not completely airtight, hence why in 2013 I sought a direct ruling from the Revenue and was assured that they were taxed as ordinary shares.
The more complicated question is this matter of what is a "good" or a "bad" ETF. A clear definition has been given so far as ETFs are concerned; essentially ETFs from tax havens are "bad" and all others are "good".
Now, as 3CC has pointed out, "bad" ETFs are in fact treated as material interests in an offshore fund and taxed at a super rate of 48% so these remain bad, or rather "ugly" in every sense of the word.
But the grey area, which interests me the most, are those collective investment vehicles which are constituted as fixed share companies (as opposed to open ended companies like ETFs), the most notable being UK Investment Trusts.
These are what I have been referring to as "bad" ETFs which is rather a misnomer as they are neither bad nor ETF
The tax treatment of these should be obvious i.e. taxed as ordinary shares (which is now a good thing compared to 41% exit tax on ETFs). However, Rory Gillen has suggested that it is not completely airtight, hence why in 2013 I sought a direct ruling from the Revenue and was assured that they were taxed as ordinary shares.