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Author Topic: US shares - for those with EE accounts  (Read 52069 times)

jaDEB

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Re: US shares - for those with EE accounts
« Reply #30 on: September 08, 2017, 07:50:09 am »
 :'(
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jaDEB

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Hamster

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Re: US shares - for those with EE accounts
« Reply #31 on: September 08, 2017, 11:19:59 am »
Quote from: 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.  :'(

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 :(
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willemm

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Re: US shares - for those with EE accounts
« Reply #32 on: April 18, 2018, 01:26:14 pm »
Quote from: Patrick on June 14, 2017, 09:08:04 am
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?
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Patrick

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Re: US shares - for those with EE accounts
« Reply #33 on: April 18, 2018, 02:00:28 pm »
No, the domicile indicates where the estate duty will be due.
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willemm

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Re: US shares - for those with EE accounts
« Reply #34 on: April 19, 2018, 06:36:56 pm »
Quote from: Patrick on April 18, 2018, 02:00:28 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).
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willemm

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Re: US shares - for those with EE accounts
« Reply #35 on: April 19, 2018, 06:39:41 pm »
it seems my "brilliant" lawyers don't want to touch offshore assets in my will
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Patrick

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Re: US shares - for those with EE accounts
« Reply #36 on: April 20, 2018, 07:52:09 am »
Quote from: willemm on April 19, 2018, 06:36:56 pm
Quote from: Patrick on April 18, 2018, 02:00:28 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).
I wasn't aware that this was the case, I'll have to do some research on it.
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willemm

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Re: US shares - for those with EE accounts
« Reply #37 on: April 23, 2018, 05:26:55 pm »
Quote from: Patrick on April 20, 2018, 07:52:09 am
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.
« Last Edit: April 23, 2018, 05:29:01 pm by willemm »
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IndustryGuy

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Re: US shares - for those with EE accounts
« Reply #38 on: May 10, 2018, 09:38:14 am »
Quote from: Hamster on June 09, 2017, 11:37:04 am
Quote from: 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/

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.
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rjthomas

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US investments via Easy Equities - What is the split?
« Reply #39 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?
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willemm

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Re: US shares - for those with EE accounts
« Reply #40 on: June 06, 2018, 10:49:32 am »
Quote from: Patrick on April 20, 2018, 07:52:09 am
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.
Hi Patrick, out of interest - have you done some research on this yet?
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Patrick

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Re: US shares - for those with EE accounts
« Reply #41 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.
« Last Edit: July 05, 2018, 07:31:32 am by Patrick »
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trevormuche

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Re: US investments via Easy Equities - What is the split?
« Reply #42 on: June 12, 2018, 02:02:18 pm »
Quote from: 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?

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
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willemm

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Re: US shares - for those with EE accounts
« Reply #43 on: June 12, 2018, 02:23:19 pm »
Quote from: 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 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
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