Goodbye 'No Money, No Clue', Hello FI!

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21

Hello there. Congratulations on the imminent baby.

I think the key is make an asset allocation decision and then stick to it. There isn’t really a “right” answer, but if you are buying low cost index funds, you are doing the right thing. I just bought CHSPI (iShares core SPI) for my Swiss portion because the TER looked lowest.

One question for the forum: I have been looking at Corner Trader and IB for future investments. IB is US-based, so is there any impact in terms of tax or other footprint in the US if you are not US-resident? I believe that there are some complications in inheritance tax if you hold US securities (so it makes sense to have US exposure through Ireland-based ETFs), but if your broker is based in the US, are there any possible other problems?

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22

As a swiss resident you’ll be dealing with its UK subsidiary. So no estate tax issues, unless you buy US stocks, but also no SIPC protection, only inferior FSCS.

23

It was already discussed: here and here and here. To sum it up: IB + US-based ETFs is the cheapest retail option in Switzerland and US estate tax is not an issue for Swiss residents.

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24

Thanks 1000000CHF. Those were very useful threads. I’m new to this forum, so I hadn’t seen those.

However, from Hedgehog’s comment on dealing with IB’s UK subsidiary, this could cause me problems, as I’m a UK national (so any UK assets I hold in the UK are subject to UK tax). I will look into this and let you all know if I find anything interesting! I might just stick with my current brokers (was only looking to spread assets around to reduce risk).

There are quite a few tax traps around which complicate matters. Still, Mustachian problems are good ones to have!

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25

Even if it’s not frugal, sometimes it’s better to pay a tax advisor to avoid bad surprises :wink:

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26

Well, if I have a tax surprise next year, then at least I won’t be the only one in this forum. :stuck_out_tongue:

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27

Ok - here’s what I found. I contacted IB, and as a Swiss resident, the custody account is held by IB in the UK.

However, this does not mean that the account is subject to UK income or capital gains taxes for non-UK residents (government website here: https://www.gov.uk/government/publications/statement-of-practice-1-2001/statement-of-practice-1-2001-treatment-of-investment-managers-and-their-overseas-clients)

So it looks fine for Swiss residents. (However, don’t take this as advice - it is just the info I have been supplied.)

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