r/stocks
Best foreign domiciled ETF for S&P500?
Non-US investor seeks low-fee non-US domiciled ETF alternatives to VOO to avoid US estate taxes and reduce dividend withholding.
I'm not American and dont live in the US. However, my wife is American, (but not a US resident).
I recently learned that upon my passing, all of my US domiciled equity holdings in VOO will be subject to US estate taxes before they are given to my wife! I'm annoyed I didnt know this already, but glad I found out before its too late!
It seems I can bypass this liability by moving into non-US domiciled etfs, such as VUAA. I also learned that i can lower my dividend taxes from 30% to 15% in non-US domiciled funds?
However it seems that the expense ratio of these ETFs is much higher at 0.07% as compared to 0.03% for VOO.
First, if my understanding above is wrong, please let me know.
And then, does anyone have a better product/solution for lower fee non-US domiciled etfs?
Thanks!
Look for SPYL, the expense ratio is 0.03% https://www.ssga.com/ie/en\_gb/institutional/etfs/state-street-spdr-sp-500-ucits-etf-acc-spyl-gy
This is the correct answer
I’m a non American non us tax resident, living In a place that has no tax (uae). I’ve been putting money into spy. Is that on or is spyl better for any reason or is there some other etf I should be looking at ?
When you're investing in dividend vehicles situated in another country where you live doesn't change the tax law related to the asset/exchange the ticker is listed on.
In America, in the UAE, or on Mars - someone holding SPY is subject to 30% tax on dividend distributions - generally, this tax is automatically deducted by your brokerage, and you never see it hit your account. US-domiciled assets in excess of $60,000 are subject to the U.S. Estate Tax.
You would have to be in non-domiciled funds/etfs to avoid that - you'd still be paying a 15% tax through UCITS (Ireland) because it is impossible to legally fully avoid that.
And for anyone thinking an American can undercut their dividend taxes by holding something like SPYL - the reverse is actually true. The laws are written to be punitive so that holding SPYL (etc) as an American citizen is decidedly more punitive than holding SPY.
Well that’s dividend paying stock but this is capital gains not dividends as I understand?
Thank you
Maybe I’m an idiot and missing what country you’re in but Canadian listing is VFV
I'm in the Middle East.
Thanks
I use SPXS on the LSE. Very important. Do not buy the Direxion ticker with the same name.
Ireland
Thanks
Why aren't anyone recommending CSPX? It's accumulative, no capital gains tax and no inheritance tax.