Does it make a difference if I buy an ETF from SIX or LSE?

Taxes
1

Hello,

I want to buy the VUSA ETF which domiciled in Ireland.

I am aware this is not tax-optimal, but unfortunately I do not yet qualify for an account with the Interactive Brokers since I have never traded stocks before, and because of this I will use Degiro instead this year.

I am planning to invest 20k CHF, and I noticed this ETF is available in both LSE and SIX. https://www.justetf.com/uk/etf-profile.html?isin=IE00B3XXRP09&tab=listing

Since Degiro charges exchange rate fees, I would prefer to buy the SIX one since it is sold in CHF.

My question: Does it make any difference in which stock exchange I buy the ETF, other than the currency? (E.g. duty stamps, or tax pitfalls, or tax forms convenience?)

Thanks

1 Like
2

Or you could lie to IB :wink:

How does it work on Degiro? Does it allow to top up in CHF and to hold CHF? If so, then it would be the best to buy the CHF one. They are all equivalent to each other, you are buying the same thing, 1 unit is 1 unit. I own VEUR in CHF and had no surprises.

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3

In fact I am forced to only deposit money from a CH IBAN in CHF. They do not accept other currencies, or TransferWise / Revolut, or foreign banks.

In addition to that, they charge quite a hefty amount of money (max 10%) for receiving dividends, unless you grant them the right to loan your top 2 or 30% of your total stocks to 3rd parties. I am guessing this is so that they can offer shorting services: Strong & Reliable | You can trade with DEGIRO (Securities lending). I took this risk since I think the chance of the broker defaulting is small.

They are all equivalent to each other, you are buying the same thing, 1 unit is 1 unit. I own VEUR in CHF and had no surprises.

I see, so the stock market does not play any role. This is very useful to know :slight_smile:

One quick question, the stamp duties people talk about apply only to Swiss brokers such as Swissquote, when buying from SIX?

4

I don’t advocate or condone lieing to tax authorities - or banks.
But previous trading experience is the one thing I would lie about if needed to get in.
They won’t care anyways, as long as you aren’t acting up or asking stupid questions.

5

You know, when I opened my IB account, I said I had 2 years of experience and made 50 trades, which already was an overstatement. But I still was not allowed to trade. I called their support and when I was all defensive about upping these numbers, the support guy said something like “do you want to be able to trade, or not?”. Lol…

2 Likes
6

With only 20k makes more sense to go DeGiro than IB anyway in terms of fees.

In terms of where to buy ETFs:
Buying in London will have 0.1% forex fee. In addition to this London has a 0.5% tax for buying and selling. London has no withholding tax.

If you buy SIX listed in CHF there will be no forex fee. There is no additional withholding tax in IE based ETFs listed on SIX. The Dividend will not be in CHF so expect forex fees there.

But my recommendation for this particular ETF would be to buy it in Amsterdam, because its on the DeGiro Free ETF list, but only if you buy in Amsterdam. The forex of 0.1% will apply, but this is a lot lower than paying the fee.

For your ETF its:

  1. Euronext Amsterdam
  2. SIX
  3. LSE
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7

This is quite useful thanks.

If this ETF wasn’t listed in the DeGiro Free ETF list, it would make more sense to buy it in SIX to save the forex fee right? (Asking for more general advice).

8

Yes, also compared to London you dont have to pay London Buying/Selling Tax.

1 Like
9

I think ETFs are exempted

10

The additional element to consider for which stock exchange to go for would be the regular spreads (difference between buying/selling prices) being charged at a certain stock exchange for this ETF.

11

Didn’t know that, I usually only buy single stocks. So don’t know about ETFs.