Do I have to pay taxes on capital gains if I sell a 3ETF portfolio to buy FTSE Global All-Cap?

Hi all,

A bit more than 3 months ago I started investing following a long term passive investing strategy with a portfolio composed of IWDA, EIMI and WSML (using market cap weighting). The reason to pick that portfolio over a one ETF portfolio such as a portfolio composed of FTSE Global All-Cap, was that I preferred to have a portfolio with a higher number of constituents (8,906 constituents over 6,907) and also with a higher percentage of small caps (which in my opinion is closer to a GDP weighting approach).

However, I have realized that by looking at the prices and all the information in order to rebalance my portfolio, I may be misguided by my irrational and emotional part (and this may lead to irrational actions in the future). For this reason, I have decided to switch to a one ETF portfolio (FTSE Global All-Cap), which will allow me to become in some sense more passive (no need to check any information a part from just buying more of that ETF) and to disconnect a bit of what’s actually happening with my portfolio (at least in the short term).

Hence, I wanted to ask you what would be the correct approach to do this change in order to not pay taxes or minimize the amount of taxes paid?

Should I still hold those ETFs for 2 additional months (so it makes 6 months in total and I am not considered a professional investor) before I sell them even if it is to reinvest that money on another ETF?

Thanks a lot in advance!

You won’t pay capital gains taxes because you won’t be considered a professional investor. The main question the tax office asks is: does this guy live of his investments? Either: is he a trader? or is he retired?

Now, they need criteria and that’s why they published the infamous list. But if you earn 100k per year and happened to sell 10k worth of investments to reinvest them elsewhere once a year, even though you might have hold your investment for 4 months, nobody will start to think that you’re a professional investor. You’re obviously not a trader and you’re obviously not a retiree.

So keep cool and rebalance :slight_smile:

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