The JSE and finance forum for South Africa

General Category => Shares => Topic started by: Mr_Dividend on April 24, 2017, 09:51:03 am

Title: US shares - for those with EE accounts
Post by: Mr_Dividend on April 24, 2017, 09:51:03 am
From todays sens:

Quote
Over the next six months we will be adding US shares to the platform and retirement
wrappers, amongst other exciting enhancements that will no doubt continue to
attract new clients and assets to the platform and bring us closer to our vision of
democratising investing for all South Africans.
Title: Re: US shares - for those with EE accounts
Post by: Patrick on April 24, 2017, 10:52:05 am
This will be great as long as they don't have a custody fee like ABSA does.
Title: Re: US shares - for those with EE accounts
Post by: Hamster on April 24, 2017, 02:31:44 pm
Add limit orders, a table layout and an allocation graph together with US shares and you have a very very awesome product.
Title: Re: US shares - for those with EE accounts
Post by: czc on April 24, 2017, 02:40:08 pm
They better hurry up while the Rand is still doing well.
Title: Re: US shares - for those with EE accounts
Post by: jaDEB on April 24, 2017, 04:55:44 pm
They better hurry up while the Rand is still doing well.

 :whistle:   Agree. Me thinks the same . Some people are turning positive, hope they prove me wrong. Me I am ^&%$#@ negative as the voices in my head allows me to be, only reason why little bit of positive is for my wife and kids sake. ag jaDEB get over it now for &^%$# sakes.
Title: Re: US shares - for those with EE accounts
Post by: JohnnyH on April 26, 2017, 10:33:05 am
It looks like they will only offer some US shares, talking about S&P 100 (which I am assuming are the 100 biggest companies) etc.

I do hope we will have access to some of the "boring" big stocks like JNJ, KO etc & not just facebook & Apple etc.

Still, I am excited about having the option!
Title: Re: US shares - for those with EE accounts
Post by: jaDEB on April 26, 2017, 12:18:22 pm
I am currently looking at opening a account thru my Broker SASFIN that is offshore and I will dabble in Tencent (Actual) Tencent and not NPN. exciting times :)
Title: Re: US shares - for those with EE accounts
Post by: shifty on June 09, 2017, 09:19:12 am
Hi,
Have you guys heard this pod cast on offshore investing...
https://justonelap.com/podcast-offshore-investing-candice-paine/
Title: Re: US shares - for those with EE accounts
Post by: Hamster on June 09, 2017, 11:37:04 am
Hi,
Have you guys heard this pod cast on offshore investing...
https://justonelap.com/podcast-offshore-investing-candice-paine/

Quote
By far the scariest part of this conversation has to do with estate duties. As two of our listeners pointed out, should you die when your money is offshore, you will pay estate duties in the country where you are invested. In the USA and the UK, that is 40%. Think about that for a second. Almost half of your investment gets destroyed simply because you died – as if you had a choice!

Bloody hell! 40%?!
Title: Re: US shares - for those with EE accounts
Post by: jaDEB on June 09, 2017, 02:43:02 pm
Ditto .. .. .. .. .. .. .  :frustrated:
Title: Re: US shares - for those with EE accounts
Post by: Patrick on June 14, 2017, 09:08:04 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.
Title: Re: US shares - for those with EE accounts
Post by: Hamster on June 14, 2017, 01:04:10 pm
And that is why I like this forum ^
Title: Re: US shares - for those with EE accounts
Post by: jaDEB on June 14, 2017, 04:33:46 pm
Ditto
Title: Re: US shares - for those with EE accounts
Post by: conradl on June 17, 2017, 07:07:04 am
Patrick, jy is 'n yster! :)
Title: Re: US shares - for those with EE accounts
Post by: jonb on June 18, 2017, 11:28:12 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.

Once again! excellent information!!!!

 :TU:

My portfolio is held in a Netherlands Bank which I am still active on travelling out there a few times a year and having lived there several years

Do you think its needed to do anything to safeguard against this?
Title: Re: US shares - for those with EE accounts
Post by: Hamster on June 27, 2017, 09:30:14 am
Here you go, link to competition sign up: http://bit.ly/2rWIgbC  - I see Tesla, Facebook and Apple on there :)
Title: Re: US shares - for those with EE accounts
Post by: Patrick on June 27, 2017, 10:05:07 am
I wonder if they'll offer some of the US listed ETFs too?
Title: Re: US shares - for those with EE accounts
Post by: JohnnyH on June 27, 2017, 12:35:05 pm
I wonder if they'll offer some of the US listed ETFs too?

Looks like it, from the competition list (http://blogs.easyequities.co.za/crowd-sourced-stock-picks) :

iShares Asia Pacific Dividend UCITS ETF USD

iShares Asia Property Yield UCITS ETF USD

iShares China Large Cap UCITS ETF USD

iShares Core EURO STOXX 50 UCITS ETF EUR

iShares Core FTSE 100 UCITS ETF GBP

iShares Core MSCI EM IMI UCITS ETF USD

iShares Core MSCI Japan IMI UCITS ETF USD

iShares Core MSCI Pacific ex-Japan UCITS ETF USD

iShares Core MSCI World UCITS ETF USD

iShares Core S&P 500 UCITS ETF USD

iShares Developed Markets Property Yield UCITS ETF USD

iShares Edge MSCI EM Minimum Volatility UCITS ETF USD

iShares Edge MSCI World Minimum Volatility UCITS ETF USD

iShares Edge S&P 500 Minimum Volatility UCITS ETF USD

iShares EM Dividend UCITS ETF USD

iShares Euro Dividend UCITS ETF EUR

iShares Global Corp Bond UCITS ETF USD

iShares Global Govt Bond UCITS ETF USD

iShares Global High Yield Corp Bond UCITS ETF USD

iShares Global Infrastructure UCITS ETF USD

iShares Global Water UCITS ETF USD

iShares MSCI Brazil UCITS ETF USD

iShares MSCI Korea UCITS ETF USD

iShares MSCI USA Dividend IQ UCITS ETF USD

iShares USD EM Corp Bond UCITS ETF USD
Title: Re: US shares - for those with EE accounts
Post by: Hamster on June 27, 2017, 02:29:11 pm
Good things are happening
Title: Re: US shares - for those with EE accounts
Post by: Mr_Dividend on July 05, 2017, 10:50:28 am
Will be very interested to see how dividends are treated. But must say, looking interesting. Always wanted to own VISA - but lot's of really interesting companies there, others for me would me AMD and Nvidia - but looks like lot's of hours of research in front of me - excellent.

So would be interested to know - what you looking at. And what percentage of SA shares will you be selling to buy US shares? I am thinking 1/4 - 1/3
Title: Re: US shares - for those with EE accounts
Post by: Hamster on July 05, 2017, 03:10:48 pm
Will be very interested to see how dividends are treated. But must say, looking interesting. Always wanted to own VISA - but lot's of really interesting companies there, others for me would me AMD and Nvidia - but looks like lot's of hours of research in front of me - excellent.

So would be interested to know - what you looking at. And what percentage of SA shares will you be selling to buy US shares? I am thinking 1/4 - 1/3

Think I'll wait and see how this pans out.

Transaction fees: 0.735%
Title: Re: US shares - for those with EE accounts
Post by: jaDEB on July 05, 2017, 04:01:48 pm
Will be very interested to see how dividends are treated. But must say, looking interesting. Always wanted to own VISA - but lot's of really interesting companies there, others for me would me AMD and Nvidia - but looks like lot's of hours of research in front of me - excellent.

So would be interested to know - what you looking at. And what percentage of SA shares will you be selling to buy US shares? I am thinking 1/4 - 1/3

Think I'll wait and see how this pans out.

Transaction fees: 0.735%

Apparently AMD & Nvidia share prices movement is partly due to Bitcoin mining. To mine you have to upgrade your computer major.
Title: Re: US shares - for those with EE accounts
Post by: JohnnyH on July 06, 2017, 08:28:28 am
Will be very interested to see how dividends are treated. But must say, looking interesting. Always wanted to own VISA - but lot's of really interesting companies there, others for me would me AMD and Nvidia - but looks like lot's of hours of research in front of me - excellent.

So would be interested to know - what you looking at. And what percentage of SA shares will you be selling to buy US shares? I am thinking 1/4 - 1/3

Think I'll wait and see how this pans out.

Transaction fees: 0.735%

Total transaction fee? If yes then actually very good, local equities is at 0.64% if I am not mistaken. The one thing I would like to know is, how do they handle currency conversion..or do you need to deposit $$$? IF we can deposit ZAR & they handle everything for 0.735% it would be epic!
Title: Re: US shares - for those with EE accounts
Post by: Hamster on July 06, 2017, 11:44:37 am
Total transaction fee? If yes then actually very good, local equities is at 0.64% if I am not mistaken. The one thing I would like to know is, how do they handle currency conversion..or do you need to deposit $$$? IF we can deposit ZAR & they handle everything for 0.735% it would be epic!

It would seem that way. I did a rough calculation from the values on the screen. Would wait until the real deal/live site is here before getting excited. Some of their links point to JSE, Tesla for example: JSE:TSLA. So there are a few kinks they need to iron out and forgetting to add some charge might be one of them.

I had to ask them just this week why they are charging STRATE on AMIB50 ETF which was an oversight by them and they're busy refunding those they erroneously charged.
Title: Re: US shares - for those with EE accounts
Post by: jonb on July 09, 2017, 12:02:42 pm
Will be very interested to see how dividends are treated. But must say, looking interesting. Always wanted to own VISA - but lot's of really interesting companies there, others for me would me AMD and Nvidia - but looks like lot's of hours of research in front of me - excellent.

So would be interested to know - what you looking at. And what percentage of SA shares will you be selling to buy US shares? I am thinking 1/4 - 1/3

I went about 90% US vs 10% SA about 5 years ago as I was living in the US/EU at the time

Since recently living back in SA again I have started to ( slowly & cautiously ) grow SA portfolio again as I see what companies are doing here in very few cases and believe in it for future, Overall though... if I compare my own single stock selection's growth of US portfolio vs SA over the past 5 years ( very importantly not including any growth of rand dollar decline as I am based in dollars ) the best I can say is my SA portfolio, while had a few wins overall performed like a spluttering VW Beetle!!!!! on the other hand the US portfolio ( very strongly focused on tech and healthcare stocks ) roared like a Ferrari!!

In saying that, it pays to be aware of the strong run the US has been on , Tech is at extremely high multiples, caution advised ... however well worth the research @Mr_Dividend! 

I have had some amazing growth stories over this time with both Visa & NVIDIA being some of them :TU:

Title: Re: US shares - for those with EE accounts
Post by: czc on September 04, 2017, 09:27:44 am
So it looks like you have to move funds offshore yourself at the moment to get USD in your EE USA account.
Title: Re: US shares - for those with EE accounts
Post by: Patrick on September 04, 2017, 10:16:11 am
Yes I see that, and if the fees are the same as the demo account, ie 0.74% then it's actually quite expensive. When I buy VWRD on interactive brokers I pay just 0.08%.

The only benefit here is no monthly charge and no minimum account balance. Degiro offers that, but they don't allow any of the Isle of man bank accounts as most SA banks offer, and also neither of the two other EU bank accounts I opened.
Title: Re: US shares - for those with EE accounts
Post by: Mr_Dividend on September 07, 2017, 10:00:39 am
It does look interesting. Slight pain for me as i would need to open a bank account with another company as Capitec does not do SWIFT. Think I would do it if I planned to stay in SA, but as we definitely emigrating, will hold off. Really want a degiro account and all that is offers.
Title: Re: US shares - for those with EE accounts
Post by: Patrick on September 07, 2017, 11:37:44 am
I'd only recommend De Giro for smaller amounts. With their regular account they can lend your shares out to shorters with you taking the risk. With their custody account they don't but then they take 3% off your dividends.

If you have over $100k to invest there is no better broker than interactive brokers. For under that you need to work out if the $10 a month fee outweighs the 3% dividend fee of Degiro.

Where are you emigrating to?
Title: Re: US shares - for those with EE accounts
Post by: Mr_Dividend on September 07, 2017, 02:47:32 pm
Very good point - had not seen that!

Will be going to the UK - couple of years away though (probably), dependent on when our dogs die.  :'(
Title: Re: US shares - for those with EE accounts
Post by: jaDEB on September 08, 2017, 07:50:09 am
 :'(
Title: Re: US shares - for those with EE accounts
Post by: Hamster on September 08, 2017, 11:19:59 am
Very good point - had not seen that!

Will be going to the UK - couple of years away though (probably), dependent on when our dogs die.  :'(

I sit with a similar problem, except it is a cat and only 2.5 years old. Not sure if I want to put it through all that travel and quartine BS or pay R15k+ to get it overseas and then sit with the issue of rental units not allowing pets. Granted, the missus got the hell spawn before she met me but there is a reason I don't own a dog yet...

She actually had two and we had to find one another home before she could move into the complex. The idea of having to go through that again some day :(
Title: Re: US shares - for those with EE accounts
Post by: willemm on April 18, 2018, 01:26:14 pm
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?
Title: Re: US shares - for those with EE accounts
Post by: Patrick on April 18, 2018, 02:00:28 pm
No, the domicile indicates where the estate duty will be due.
Title: Re: US shares - for those with EE accounts
Post by: willemm on April 19, 2018, 06:36:56 pm
No, the domicile indicates where the estate duty will be due.

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).
Title: Re: US shares - for those with EE accounts
Post by: willemm on April 19, 2018, 06:39:41 pm
it seems my "brilliant" lawyers don't want to touch offshore assets in my will
Title: Re: US shares - for those with EE accounts
Post by: Patrick on April 20, 2018, 07:52:09 am
No, the domicile indicates where the estate duty will be due.

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.
Title: Re: US shares - for those with EE accounts
Post by: willemm on April 23, 2018, 05:26:55 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.
Title: Re: US shares - for those with EE accounts
Post by: IndustryGuy on May 10, 2018, 09:38:14 am
Hi,
Have you guys heard this pod cast on offshore investing...
https://justonelap.com/podcast-offshore-investing-candice-paine/

Quote
By far the scariest part of this conversation has to do with estate duties. As two of our listeners pointed out, should you die when your money is offshore, you will pay estate duties in the country where you are invested. In the USA and the UK, that is 40%. Think about that for a second. Almost half of your investment gets destroyed simply because you died – as if you had a choice!

Bloody hell! 40%?!

There are ways to work around it by means of tax wrappers.
Title: US investments via Easy Equities - What is the split?
Post by: rjthomas on May 10, 2018, 07:21:51 pm
My split looks like this
ZAR Equities: 37%
USD Equities: 10%
TFSA: 53%

A lecturer from my BSc days in Port Elizabeth told me a while ago to move everything to the US. I am thinking of moving up to 50% of my funds into the US account. But what is your split for the USD account and how much do you plan to keep in SA vs US on EE?
Title: Re: US shares - for those with EE accounts
Post by: willemm on June 06, 2018, 10:49:32 am
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.
Hi Patrick, out of interest - have you done some research on this yet?
Title: Re: US shares - for those with EE accounts
Post by: Patrick on June 07, 2018, 04:13:22 pm
I did do some reading Willem. I started here: https://www.moneyweb.co.za/mymoney/moneyweb-tax/foreign-investing-how-do-i-navigate-wills-and-tax/

She basically claims that if you only have an offshore investment portfolio and no immovable assets you're okay with just a local will.

I've also previously seen that UCITS funds like the VWRD I own are estate duty free in Ireland, so that's another relief for me.

If you're still worried you could always have a joint account with survivorship rights in which case the account holdings transfer solely to your spouse on presentation of a death certificate.

So in short, I'll only do a local will.
Title: Re: US investments via Easy Equities - What is the split?
Post by: trevormuche on June 12, 2018, 02:02:18 pm
My split looks like this
ZAR Equities: 37%
USD Equities: 10%
TFSA: 53%

A lecturer from my BSc days in Port Elizabeth told me a while ago to move everything to the US. I am thinking of moving up to 50% of my funds into the US account. But what is your split for the USD account and how much do you plan to keep in SA vs US on EE?

Mine is 70% offshore and 30% in SA. The SA holding is pretty much Provident and Preservation Funds that I unfortunately have no control over. My long term target is to be 99% offshore and 1% SA
Title: Re: US shares - for those with EE accounts
Post by: willemm on June 12, 2018, 02:23:19 pm
I did do some reading Willem. I started here: https://www.moneyweb.co.za/mymoney/moneyweb-tax/foreign-investing-how-do-i-navigate-wills-and-tax/

She basically claims that if you only have an offshore investment portfolio and no immovable assets you're okay with just a local will.

I've also previously seen that UCITS funds like the VWRD I own are estate duty free in Ireland, so that's another relief for me.

If you're still worried you could always have a joint account with survivorship rights in which case the account holdings transfer solely to your spouse on presentation of a birth certificate.

So in short, I'll only do a local will.

interesting, thanks.. I'm going back to my attorneys soon to talk about this