This is true for TransferWise “on demand” transfers, i.e. where
you pay in to the CHF account with CH IBAN in the name of TransferWise Ltd. held at JPMorgan Chase Bank, Zurich (CHASCHGX) - or alternatively by card payment
they’ll convert the funds GBP and
pay out to the receiving party (from, again, an account in their own name name) to Fundsmith
…in “one go”.
The TransferWise Borderless multi-currency account (which does have it’s own terms and conditions and acceptable use policy) does provide GBP banking details in my name.
A domestic GBP payment within the UK will not appear as a transfer from a 3rd party but instead have my name on it as the sender. It’s exactly the same as any other UK customer transferring from his bank account at one of the high street banks.
Note though that TransferWise is still technically an E-Money service and account. While there should be no technical difference in the transfer itself technically, the recipient might scrutinise or reject my payment from a risk-based perspective, by trusting TransferWise “less”, even though they’re using the very same payment system as the high-street banks. (Similarly, there might be a difference between a) receiving 3000 GBP from my Swiss personal bank account via SWIFT or b) receiving 3 Mio. GBP from Vietnamese personal bank account).
…which is also true on TransferWise’s side.
I did look at their acceptable use policy and I believe there’s a significant difference between card payments and the borderless account (“The restrictions below do not apply to lawful transactions using the TransferWise Card”) - with the card seeming to have much more permissive terms (within the Mastercard framework, I guess).
For instance, there’s restrictions on transfers from the Borderless account to financial service providers: Payments to “Platforms allowing the trading and/or exchanging of FX/CFD/options.” -which I believe should include IBKR, for example, but not Fundsmith - are “unsupported”. Which doesn’t mean it will never work (for small amounts, for example - and there’s reports on the internet saying so), but they might reject it.
As for receiving funds into the TransferWise account, I believe both IBKR and Fundsmith would not be allowed according to the terms, cause they aren’t “people” sending. This does match with Fundsmith’s assertion on the phone to not accept TransferWise as a reference bank account.
Revolut to Fundsmith bank transfer should be fine, as long as you’re sending from a GBP Revolut account in your name (in accordance with Revolut’s T&C). Though Revolut have been using CurrencyCloud for at least some outgoing customer transfers AFAIK.
So should be TransferWise borderless account balance to Fundsmith (but not the “send money” function, since the payment will probably be from TransferWise’s account).
Card payments should fine as well, if the card is in your name.
All of course assuming within reason (and certain limits).
Personally, while TransferWise may have stricter terms and conditions and may be more expensive than Revolut and even though they work similarly in many ways (and with a similar license), I’d put much more trust in TransferWise than Revolut.
Anyone owning SSON and FEET…any idea how it works with the tax on dividends? I assume they dont distribute the dividends, but I could also not see on their website the dividends docs for taxes.
They do. They have to, in fact, to maintain their UK investment trust status, if I understand correctly.
Incidentally, I came across one of their fund documents just yesterday that did list the distributions.
Yes, they’re not in ICTax, are they?
I didn’t get a dividend in 2020, but only bought in autumn sometime.
Re Tax on dividends - UK dividends don’t have withholding taxes,so the whole dividend would simply be taxable income & then taxed as such.
Which share class were you trying to buy and what was the weird issue?
I have been trying to transfer shares of Fundsmith I class GBP ACC to IB from another broker. This was rejected by IB and today I was advised by IB there was a problem with a “new clearing house called ALLFUNDS SA that the transfer has to go through but it may now be possible” (not holding my breath)
All good now. I did not filled out my yearly financial data with IB and they blocked my trading permissions . But now, I did it and I could from my advisor account to buy into the fund to all my accounts . Just a strange different experience of how you can buy as an advisor account, mutual funds and stocks…different UI experiences.
Did anybody do his tax declaration with SSON already?
It doesn’t seem to be on ICTax and I’m not sure how it’s handled.
I don’t know how they are reporting it, because the fund may receive dividends earlier in the year before you bought it.
I called the tax office in Zug and have been told that they can’t give a definitive answer, but it’s likely a investor will only pay taxes on the dividends.
Worst case I can imagine is that all capital gains are taxed as dividends as they don’t accept the reporting.
Smithson is a UK “Investment Trust” (IT) which is a closed ended public investment company. I believe this is similar to a SICAF but perhaps someone on the forum can better explain than I. As far as I know Swiss residents only pay income tax on the dividends that are paid out of these companies.
If I look at other UK ITs in the ESTV database I see 2020 income = 2020 dividend paid out by the IT. Example: SMT. SSON is not yet in ESTV database, perhaps because it was only launched in 2018.
This is different to a SICAV (=open ended fund, not a company). Fundsmith is an open ended fund, SSON is an investment company.
Thanks for your effort guys. @Barto do you have to do a tax declaration for 2018?
If so, could you or anybody else please provide an update how this was handled?
Maybe @triviamaster or @Julianek ?
For my tax return, I just include the summary activity statement from IB which shows total wealth, dividends, interest and tax witheld without giving a breakdown of holdings. I did not yet get the final decision from my 2018 tax return though
Somewhat. Going by the KAG, Swiss SICAF are not listed on a (domestic) stock exchange and prohibited from issuing shares.
Smithson are authorised to issue shares and - obviously - exchange-listed (though not in Switzerland).
This has been my rationale as well, and I’ve never had any problems with mit FEET holdings. They’ve been only been in the low 5 digits in value though, and I declared them only as part of my IBKR statement.
One should note that both Smithson and FEET are different legal constructions than the vanilla Fundsmith funds (see title of this thread), so the discussion is off-topic in a way.
I did some more research. UK Investment Trusts such as Smithson and FEET are required to pay out 85% of dividends received as dividends to their shareholders.
Smithson financial report for 6 months ended 30 June 2020:
"Dividends
… In accordance with the Company’s policy, an interim dividend has not been declared by the Board.
This position will be kept under review. It should not be expected
that the Company will pay a significant annual dividend and it is
likely that no interim dividends will be declared, but the Board intends to declare such annual dividends as are necessary to maintain the Company’s UK investment trust status. "
Thanks guys, this is starting to be pretty complicated and that’s what I usually try to avoid.
Not sure if it’s worth opening a new thread, if so a model could please split the topic.
I bought a first batch of SSON at IB with the tiered pricing model.
Boy that was expensive… anybody knows a better way before I try different options?
It seems to be even more complicated to open an account with them so not sure if it’s worth the effort.
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
. But now, I did it and I could from my advisor account to buy into the fund to all my accounts 