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Shares / Offshore USD ETFs - Accumulating or Distributing?
« on: February 14, 2020, 07:01:02 pm »
Hey Guys!
I've just started investing USD with Interactive Brokers about 6 months ago. I had been investing in US-Domiciled portfolio of ETFs, currently 70% US Equity (VTI), 20% international Equity (VXUS), and 10% Global Bonds (BNDW). I now I realize that I should probably switch to the Irish-domiciled equivalents. I'm thinking of a simple 2-fund USD portfolio - 90% Global Equity (probably VWRA) / 10% Global Bond (probably (VAGU).
My question is, which type of ETF is more tax efficient for South Africans? If I buy Accumulating ETFs where the dividends are reinvested automatically within the fund, are we still charged normal tax on that, even though it's not distributed? If so, is it better to just buy distributing ETFs? I can't find any information with SARS regarding how this is handled.
Thanks for the feedback.
I've just started investing USD with Interactive Brokers about 6 months ago. I had been investing in US-Domiciled portfolio of ETFs, currently 70% US Equity (VTI), 20% international Equity (VXUS), and 10% Global Bonds (BNDW). I now I realize that I should probably switch to the Irish-domiciled equivalents. I'm thinking of a simple 2-fund USD portfolio - 90% Global Equity (probably VWRA) / 10% Global Bond (probably (VAGU).
My question is, which type of ETF is more tax efficient for South Africans? If I buy Accumulating ETFs where the dividends are reinvested automatically within the fund, are we still charged normal tax on that, even though it's not distributed? If so, is it better to just buy distributing ETFs? I can't find any information with SARS regarding how this is handled.
Thanks for the feedback.