Am I overthinking VWCE vs VT as a Swiss who might leave soon?

Investing / Portfolios
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Hi everyone,

This is my first post here. I’ve been reading the forum for a while and learned a lot, so thanks to everyone contributing. I’d like to get some feedback on my ETF strategy before getting started.

I’m Swiss, 32 years old, currently living in Switzerland, but I may move abroad as soon as this year. I work in design, and Switzerland is not necessarily the most strategic place for my field, so relocation is a real possibility in the near term.

Financially, I currently have around 100k in capital, but I plan to keep about 30% as cash savings. I’m also in a transition phase at the moment: I’m working independently, so I can’t invest much more than what I already have, at least until I either secure a full-time job here or decide to relocate. Going forward, I expect to invest roughly 10k per year into ETFs.

I’m using Interactive Brokers.

My initial plan is:

  • Start investing in VWCE for simplicity and flexibility (no DA-1, easy to manage if I move abroad)

  • If I end up staying in Switzerland, and once I reach around 30–40k invested, I will consider switching to VT to optimize withholding tax (via DA-1)

  • If I move abroad, continue with VWCE to avoid complications

Since Switzerland doesn’t tax capital gains, switching later shouldn’t trigger taxes.

Does this approach make sense given my situation? Am I missing something important?

Thanks a lot for your insights!

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All things considered VWCE/VWRL and VT are nearly the same thing, and you may not be able to buy VT if you move to an EU country, but AFAIK you can continue holding, and can sell. The dividend reclaim advantage is real, but also marginal. As you’re with IBKR already trading fees are minuscule, if you were with a Swiss broker (like me) you’d think twice about it as they’d be a few hundred franks to sell and rebuy.

What’s probably more efficient is going with VT and then switching as you go. I don’t remember what the threshold for reclaiming dividend taxes is, maybe 100 franks and above? So if you wanted to be super efficient you’d calculate what the total invested amount would need to be before you can get anything back. But that might again be marginal, with trading fees etc.

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There are also cheaper ETFs based in Ireland. For example -: SPDR ACWI & Amundi WEBG

Yes you are overthinking. For a portfolio of 100K, the tax advantage of VT (after claiming DA1 benefits) vs WEBG is less than 100 CHF per year. So pick one and relax.

When you leave Switzerland, you should anyways sell everything and buy again before leaving to reset your tax basis for capital gains in next country.

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Even on IBKR? Asking as I am scenario planning leaving CH earlier than we originally thought, and what this means for the portfolio. Moving it to DEGIRO, for example, would reset the cost basis to zero, as per DEGIRO’s information, and anyway different countries gave different rules. Greece has zero capital gain or dividend taxes for UCITS ETFs so if I were to sell it’d only be US/Swiss holdings.

Edit for clarity: referring to DEGIRO’s cost basis, not how tax authorities will look at it.

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agree, ACWD (LSE - TICKER) is is a great option IMO , at 0.12% TER.
Don’t bother with US funds with these amounts.

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FWIW, I’m not sure how I’d trust this information. Maybe they mean that they don’t import the initial cost basis on transfer, it doesn’t mean the cost basis is reset for tax purpose (for countries where it matters).

(For tax authorities, cost basis doesn’t change if you transfer across broker, if anything it’s a pain to deal with brokers who can’t do that properly).

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+1 on this. Not an expert here, but Id guess authorities care about when you bought this shares and then make their own assumptioms from it. Hence I would clarify this upfront and then optimize (e.g. sell/rebuy in CH).

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Same here. I wouldn’t optimize for a hypothetical future. Optimize for your current situation (living in Switzerland). Once this changes (move abroad) adjust your investments accordingly. You lose nothing if you commit to VT in Switzerland and change to VWCE once you are in another country.

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Edited above for clarity, you’re right.

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I think when you transfer positions from one broker to another, they typically do FOP transfer. This means they buy and sell the same positions at same time instead of transferring.

I don’t know if this can be considered as tax base resetting for capital gains purposes because in your statements, it would be shown as transfer and not buy/sell trade.

I don’t think broker matters in this case. Its best to confirm what greek tax authorities will see in this transaction. I think they will see this as mere transfer.

Degiro can show whatever they want in their portfolio summary. But that wouldn’t change the fact that you have accrued capital gains over the years and authorities might want to tax it based on their jurisdiction.

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That’s not correct. Broker 1 transfers your securities to Broker 2. There is no buy/sell, just a simple securities transfer.

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Exactly, it‘s an in-kind transfer, nothing chnages to your holdings or cost basis.

Imagine they would actually buy and sell, for securities with wide spreads that could cost a big amount. Around 0.5%+ spreads for more niche products is quite common for example.

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Of course, this is theoretically correct. In this thread, it’s about VT and VWCE. These are mass market products, nothing niche.

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I made a generally applicable comment here to further explain my first point, so not sure where this is relevant?

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Thanks everyone for your replies! I really appreciate the insights.

That makes sense. In my case, if I have to move, my long-term plan would likely be to return to Switzerland as soon as I have the opportunity.

That’s also part of why I was considering VWCE: if I move abroad but don’t sell anything during that period, my understanding is that I wouldn’t trigger any capital gains tax, and could potentially sell later once back in Switzerland without being taxed on the gains.

However, this would also mean I basically lose all flexibility while abroad (no selling, no rebalancing, etc.).

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You can do all of these just might ibvolve some tax events, which is normal in other jurisdictions and just the cost of investing.

Try not to overthink it. The sums you mentioned are not worth tinkering, the saving potential is minimal.

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Additionally, I feel as if the plans to leave Switzerland and potentially come back are quite vague. A lot can still change.

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Well that’s how it looks in front end. But I think FOP transfer is not executed as a real transfer. I believe in back end one broker sells and other broker buys. But I don’t know for sure

anyhow from investor perspective it’s a transfer. So I don’t know what Degiro is talking about

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FOP means free of payment, it’s just a direct change of ownership at the depository. Normally settlement involves exchanging funds in addition to ownership transfer, here no funds are exchanged.

So yes if you squint really hard you can see if as a buy/sell (in the sense that ownership changes at the DTC), but that’s really stretching things.

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Careful: Holland is implementing a tax on unrealized capital gains. And you never know what other countries will come up with.

I’d go with @Abs_max and arrive in the new country with a clean slate, i.e. only cash.

FOP (as mentioned by Abs_max) was exactly as you describe it: transfer free of payment. Therefore a correct statement.

Brokers in jurisdictions with capital gain taxes will usually ask the sending broker for a list of original purchase prices. With other brokers (e.g. in Switzerland) it is up to you to declare whatever purchase price to preserve the performance calculation of your transferred shares.