I’d like to invest in VWRA (Vanguard FTSE All-World UCITS ETF (USD) Accumulating) in a Degiro custody account (yet to be opened). I have, however, a question about the possibility to buy this fund for a Swiss investor (honestly, it’s probably just a detail but I’m curious).
When using the ETF screener on justetf.com as a “Swiss Private Investor”, VWRA does not show up in the list (only its distributive counterpart). It does show up when login as a French|German Private Investor, or as a Swiss Institutional Investor. Why is that ?
From its page, the fund appears to be ESTV Reporting, and can be found on ICTax… yet, I was wondering if it not showing in the justetf screener should be a concern ? I’d like to keep tax returns as simple as possible
It’s not listed on a Swiss Exchange and/or in CHF. Maybe, just maybe (though in this case I doubt it) there’s some legalese preventing them from actively distributing in Switzerland.
Practical ramifications? None (you just convert the currency if needed).
We‘ve had that discussion regarding the professional trader status over and over again (though it‘s somewhat scattered around the forum). I‘ve recently quoted criteria from the ESTV Kreisschreiben. By holding „a lot“ of Vanguard Funds and living off of them, you’d clearly breach one of those. But it’s a formal fallacy to think this alone would make y a professional trader.
I get your points, not sure what happens if you start selling and live on it and what the tax office thinks of it. And laws can change, I stick to distributing.
The tax office is going to make no distinction between VWRL and VWRA - or accumulating and distributing funds in general - from a tax perspective. To the contrary, the tax admin put considerable effort and into making sure accumulating and distributing funds are taxed the same.
An accumulating ETF‘s (retained) income is taxed as your personal income, even though you as the investor don’t receive a payment but only see a capital gain in your account statement.
All that I know. I’m talking exclusively about the RE phase and what happens then. Higher costs for selling then for sure, you might make it up with automated reivestment during the acummalating phase of your wealth…
Though that’s not what the qojenniffa asked in his/her original post.
In any case, you can switch from one ETF to the other later on, if need be or the tax situation changes, i.e. before a new comes into force. Might Switzerland introduce a capital gains tax? Maybe. The Germans even did it retroactively. Kind of. Limitedly. Switzerland though? No way.
VWRA is available with DEGIRO only on the London Stock Exchange, and not in the base selection.
So you cannot buy it once amount without transaction costs.
These are higher I think compared with what you would pay on dividend costs if you would buy VWRL in Amsterdam.
Then how does it work? Do you know 100% that there is no risk? I think @MUFC_OK raised a very good point. Once retired, if all your income comes from either dividend or selling your stock, you have two options. Let’s say you need 4% per year:
option 1: 2% from dividend, 2% from selling stock. the capital gains from selling the stock are lower than 50% of your income, no need to worry
option 2: since you own an accumulating fund, you need to sell 4% of your stock each year. Much more of your income comes from capital gains.
I think for a Swiss investor it’s just easier to invest in distributing ETFs. Since you do it periodically, you can just reinvest the dividend on top of whatever you planned to invest. The time not in the market is negligible.
It also makes it easier to rebalance over time. As long as you invest at least each quarter (best after dividend) you can put the money back in with your normal order.
I don’t think there’s any world where realizing capital gains when selling long term holdings is not “private wealth management”. The circular 36 even explicitly recognizes that dynamic management of wealth is allowed (so frequency of transaction doesn’t imply professional status).
The one clear thing that might be a trigger is using external financing (e.g. loans).
By the way the Circular 36 is fairly readable (chapter 4 explains how they would decide and the weighting of the criterias).
Where do you find things like this? You read somewhere online or you did you stumble upon it at work? When I have a free minute, I will give it a look. Reading 8 pages of legal German is not my favourite free time activity
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