ETPs and the Taxman

Taxes are complicated: How can you maximize tax efficiency with ETPs?

  • ETPs and Tax

    Tax is a complex subject and one that ETP issuers, perhaps understandably, shy away from giving formal advice on. But it’s an important area to understand, since choosing the wrong product can mean you receive a suboptimal stream of income, or that you may get hit by an income tax rate that’s higher than a capital gains tax rate you could otherwise be assessed.

  • ETPs and ISA, SIPP Eligibility

    Individual savings accounts (ISAs) and self-invested pension plans (SIPPs) are tax shelters, enabling investors to “roll up” income without being taxed, and to avoid capital gains taxes. How do ETPs fit into the picture?

  • UK Reporting Tax Status

    “Reporting Fund” tax status is important for any UK-based investor investing in an offshore fund. As all European exchange-traded products (ETPs) are domiciled offshore (in centres like Ireland, Luxembourg, France, Germany, Jersey) this tax status is of particular relevance.

  • Income Treatment: Collect Payments or Reinvest Them?

    ETPs listed in London either distribute the dividends generated from the fund’s underlying holdings to shareholders or they reinvest them back into the fund. Products that continuously reinvest their dividends are also referred to as “capitalizing” or “accumulating” funds. The idea is to keep as much money invested as possible with the hopes of augmenting future cash flows. This contrasts with "distributing" funds...

  • ETP Domiciles

    The domicile (country of issue) of an ETF can have an impact both on the rate of return an investor receives and on the ability of the ETF to track its underlying index.

  • ICVCs

    Do you know your OEIC from your SICAV, your FCP from your KAG?

    All these structures are forms of European collective investment vehicles (funds) and all can be compliant with the region’s UCITS rules. UCITS sets common standards for retail funds across Europe, and a UCITS-compliant fund domiciled in one European country can be sold freely in another (in theory, at least—UCITS may have to go through a registration process to be “passported” elsewhere).