Newbie Capital Gains Tax Question on EFT investing

pizza_lord

Ok so I am thinking of investing in some ETFs that track the market (UK FTSE, Global Tracker and some UK Bonds / Gilts)

My question is about Capital Gains Tax for UK expats.

Have not lived in the UK for 10 years now and I have no plans to go back and live there (though it is possible at some point I guess).

As an expat am I liable to pay Capital Gains Tax on these investments?

My understanding is that I am if I open a Saxo Investment Account in London and make the trades there and that I am not if I open a Saxo Investment Account in Singapore (where there is no CGT).

Is this right?

Or does it depend on where the ETFs I am buying are domiciled? I know a lot of the ETFs I am looking at are domiciled in Ireland.

bowlhead99

pizza_lord wrote: »

My understanding is that I am if I open a Saxo Investment Account in London and make the trades there and that I am not if I open a Saxo Investment Account in Singapore (where there is no CGT).

Is this right?

No. Liability to tax might relate to the country you're resident in, or the location of the assets you own, but it would be very unusual for it to relate to the physical location of the broker who arranges your trades remotely.

pizza_lord

bowlhead99 wrote: »

No. Liability to tax might relate to the country you're resident in, or the location of the assets you own, but it would be very unusual for it to relate to the physical location of the broker who arranges your trades remotely.

But if I am a non UK resident British person, would I owe CGT on shares to the UK gov if I trade via an account in London?

bowlhead99

The UK doesn't decide that it is going to tax you on a gain you make based on your nationality, it taxes based on residence, and you have said you are not resident here; your 'Britishness' is not relevant. So, no.

They have introduced a variety of new rules to try to tax non UK people owning UK residential property, but you are not talking about residential property you are talking about shares or funds or other assets.

There is also a rule that if you buy assets when resident here, and then you go temporarily non-resident and dump the asset for a profit and come back within five years, you will still owe the tax when you come back. Otherwise everyone would just go overseas when they had a massive potential CGT bill, sell their stuff, and come back the next year. However that rule doesn't apply to you because you didn't buy the shares when you were a UK resident (you are only buying them now); you have been non resident for more than five years; and you are not coming back. So not one of the three facts applies to your circumstance - you're not a UK resident trying to avoid tax on things you bought as a UK resident by nipping offshore to sell them and coming back. And the location of your broker for the sales and purchases would be completely irrelevant anyway, as I mentioned in the other post.

You can look at http://www.hmrc.gov.uk/manuals/cgmanual/cg26100+.htm for more information on gains made during a period of temporary non residence, none of which seems to apply to you.

Also, in this and earlier threads you keep calling ETFs, EFTs. Please stop doing that as it's annoying to read, and I won't reply to any other threads where you keep doing that.

pizza_lord

bowlhead99 wrote: »

Also, in this and earlier threads you keep calling ETFs, EFTs. Please stop doing that as it's annoying to read, and I won't reply to any other threads where you keep doing that.

Told you I was a newbie

Thanks very much for the feedback and info

Sounds like I may as well open a London based Saxo trading account or with another firm.

So now the question becomes (and this question is directed at everyone), would you recommend anyone better than Saxo for what I am looking to do?

If so then who and why would you say they are better?

Pincher

Exchanges For Trading.


So you are not buying and selling stock exchanges, then?

pizza_lord

Nobody have better recommendations that Saxo?

They that good?

bowlhead99

pizza_lord wrote: »

Nobody have better recommendations that Saxo?

They that good?

Different services and cost structures suit different people. You are looking for recommendations for your circumstances. But you previously explained that you were a digital nomad travelling over Asia without a tax residency in any country. I don't know how true that is, but it is not a set of circumstances you share with many people on this, a UK-centric board full of UK residents. Most of us have not researched better recommendations for your circumstances as we don't have your circumstances.

Personally I use TD Direct Investing who are good for what I want.

EdSwippet

Two thoughts...

Other nomads have found Interactive Brokers to be a good platform for holding ETFs. Potentially rather more 'full featured' than you want or need, but may be useful if you can cut through the complexities.

You should avoid US domiciled ETFs because they can expose you to rapacious US estate taxes. Best to stick to UCITS ETFS, typically domiciled in either Ireland or Luxembourg.

pizza_lord

EdSwippet wrote: »

Two thoughts...

Other nomads have found Interactive Brokers to be a good platform for holding ETFs. Potentially rather more 'full featured' than you want or need, but may be useful if you can cut through the complexities.

You should avoid US domiciled ETFs because they can expose you to rapacious US estate taxes. Best to stick to UCITS ETFS, typically domiciled in either Ireland or Luxembourg.

Why would you avoid non UCITS ETFs?

masonic

pizza_lord wrote: »

Told you I was a newbie

Newbies are generally better off buying open ended funds through a platform that offers free trading. That way, when they realise they've messed up their asset allocation, they don't have to pay to switch it around.