I’ve just read this guide again - I got a lot out of it the first time, even more the second time. Thanks again for a providing a great resource @tkrunning!
Another thorough and detailed article, thank you.
I am a UK expat now living permanently in a country no one has ever heard of, with no CGT or income tax and without foreign income tax treaties, just property taxes and that’s it. (yes, I know, a rare combination). It’s tax inefficient for me to even consider shares or ETFs where dividends are taxed at source.
Even investing in an ETF domiciled in Ireland only reduces the US withholding tax on dividends from 30% to 15%. 15% is 15% more than I would pay if I invested in an ETF which ONLY bought into companies which reinvested such income into its future expansion or into share buybacks.
Over the longer term this would make a HUGE difference and is stopping me from investing anywhere but the UK which will not withhold anything at all, leaving me to sort taxes (there are none) in my very benign jurisdiction.
Sure the UK charge 0.5% stamp duty at the time of purchase, but if I wanted to avoid this there are many other exchange worldwide where this is not the case. It’s a relatively minor issue.
If I’m correct, then I should be able to find an ETF entitled something like (jokingly) “S&P 500 no dividends”.
I know my situation is rare, but am I missing something obvious here or am I on to something? It’s preventing me from spending anything at all in the US market.