Share Forum - Discuss JSE shares and join the Investor Challenge

The TER will have a greater effect than the spread. A 1% spread means you're overpaying by 0.5% (or underselling by 0.5%) If we assume the market will go up by 12% per year perfectly linearly then the spread will be taken care of in 2 weeks.

Even though I'd love it to be lower, it doesn't bother me.

Yeah, I totally agree. Although, I do think that this specific cost to the investor (seemingly mostly for the market maker service) should and could easily be disclosed in the minimum disclosure doc so that you are aware of the wide spread. Some of these spreads are totally out of hand - and I'm starting to see Magda's (from Sygnia) point from a few years back of ETF vs Unit trusts (passive UTs). As I understand it, if you buy a UT after market close you buy/sell at exact NAV - and without hoping there is a market maker (and more importantly hoping it's a cheap one )

So anybody have any input re joint/vs single account for offshore US securities account? Thinking of opening a joint account for me and wife, but who pays tax and what happens if one of the account holders passing on is a bit unclear?


 

Quote from: jonb on May 30, 2017, 09:54:33 pm

Hamster, I went through the hell that is ABSA Fica and now have this open, Going to transfer portfolio from EE to ABSA, will then wait till we able to transfer TFSA, any idea when that is?

I went through the same hell and planned to do just that, but since ABSA released their inactivity fee I've reversed the decision. Now going from ABSA to EE, have you decided what to do with yours?

@Hamster, aside from only being able to use only coreshares ETFs are there any monthly/annual/inactivity type fees with coreshares?

on a side note, I've transferred my TFSA from Standard bank OST to EE. That took a week and 2 days. OST was super fast to send certificates, EE also fast on receiving and everything captured correctly. So now for the wife's and daughter's TFSA to move from ABSA to EE.

Then... if all goes well, the wife's and daughter's TFSA will also be moved to EE from ABSA. (also 1 x ETF for each portfolio)

Quote from: willemm on April 19, 2018, 06:36:56 pm

quick q.. have you managed to sort out a will yet for this? As I understand you need a specific will covering this (ex-SA).

I wasn't aware that this was the case, I'll have to do some research on it.

So currently I'm thinking of opening a Saxo account. So for that reason I asked my attorney that drafted our will regarding offshore accounts. It seems that if the offshore account is with a SA registered FSP, then they only need your estate's Executor letter to repatriate the funds and it will form part of your estate. I've confirmed this with Saxo.

However, according to my attorney if the provider is full-on offshore (like Interactive Brokers), then there is no local agent/company and a specific will in that jurisdiction have to be drawn up as an Executor's Letter will not work. Then you have to look at some kind of fiduciary company to assist to draw up a seperate will.

I've picked this up initially in the Fat Wallet episode 51 with Candice Paine. So thought to check with attorneys.

it seems my "brilliant" lawyers don't want to touch offshore assets in my will

Quote from: Hamster on June 09, 2017, 11:37:04 am

Bloody hell! 40%?!

I wish people would give proper information rather than just spout a single rubbish number.

Here's the real story:
In the US the first $60k is estate tax free, for the rest the tax rates start at 18% for the first $10k, but to get to the 40% bracket you have to have over a $1mil. There is also a potential loophole if you use a trust: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/Tax/us-tax-us-estate-and-gift-tax-rules-for-resident-and-nonresident-aliens.pdf

In the UK you're far better off. The first £325 000 is tax free, plus if you transfer to your spouse there's no tax. Then if she leaves it to the kids they can get £650 000 tax free.

But wait there's a better way:
I have an Interactive Brokers account in the US which means nothing. I buy an ETF (VWRD) that's listed on the London Stock exchange which also means nothing. The ETF is domiciled in Ireland, now that means something as the following clipping from virtually any irish domiciled fund prospectus:

Quote

However, any gift or inheritance of Shares will be exempt from Irish gift or inheritance tax once:
1. the Shares are comprised in the gift or inheritance both at the date of the gift or inheritance and at the ‘valuation date’ (as defined for Irish capital acquisitions tax purposes);
2. the person from whom the gift or inheritance is taken is neither domiciled nor ordinarily resident in Ireland at the date of the disposition; and
3. the person taking the gift or inheritance is neither domiciled nor ordinarily resident in Ireland at the date of the gift or inheritance.

So if you don't live in Ireland or leave the shares to someone living in Ireland there is no inheritance tax.

Still not convinced. If you're not holding individual shares but ETFs there's more proof from Irish revenue:

Quote

Units in any collective investment undertaking located in the International Financial Services Centre or in the Shannon Customs-Free Airport Zone are exempt from Capital Acquisitions Tax. The exemption also applies to units in Investment Undertakings which qualify for the new collective funds regime introduced by Section 58, Finance Act 2000.

In Ireland they call those funds UCITS funds. What's the full name for VWRD? Yes it's the Vanguard FTSE All-World UCITS ETF. No estate duty. Ireland has done an outstanding job positioning themselves as a destination to invest in.

I normally like justonelap, but that post is dangerous as it would discourage people from taking money offshore, meaning they would have to pay far more CGT one day than if they took their money offshore.

So a ETF listed on the London SE, domiciled in Ireland - but bought in US on US broker.

If you pass on, does that mean it becomes part of your estate in the US?

Welcome Wilhelm, I love horror stories, tell us about a few of those scar producing ones!

Thanks Patrick..

Luckily nothing too bad. Bought an empty plot in a seaside town - had to sell for 30% less than original buying price (not even talking costs). Was sold an old style RA from OM on which I had to pay penalty fees for moving to Sygnia a few years ago etc etc

But hey, that was in my late 20s... luckily have moved on a bit more wisely since then