Whilst I do think there is a case to simplify legal exposures and have advocated for it (link), I’m not sure the S&P 500 is a good example for this.
First, I think that derivatives are actually more dangerous in changing legal situations (see the mark to zero for derivatives on Russian stocks). There is a case for partially funded, loss capped derivatives (e.g. an options contract, or a LETF). If those go to zero, you will only loose a fraction of the notional instead of a 100%.
Second, physical S&P 500 is a prime candidate for Finpension’s newish reporting strategy, which should give full tax credit for withholding taxes. It seems to be going well, and will now be fought over in court according to them. But the underlying of the Irish ETF must be physical for that to work.
Third, the S&P 500 is US assets in one or another convoluted form. If the US is targeting a group that you are part of, this will hit you through the threat of secondary sanctions or some other fancy construction. Better to keep it simple and just hold US stocks through US ETFs at a US broker. Have as few other jurisdictions involved as possible.