Purchasing stocks, investing in Indexed Funds and ETFS overseas as a South African

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Topic Author
LiamH
Posts: 2
Joined: Wed Jun 02, 2021 6:41 am

Purchasing stocks, investing in Indexed Funds and ETFS overseas as a South African

Post by LiamH »

Hello,

Apologies if this is the wrong place to ask. I'm a 25 year old South African expat living in Dubai and I'm interested in beating the 1.5% offered by my savings account on the money I have here. 0 Debt and a bit of money to move around.

The available platform for me is essentially Interactive Brokers or eToro, and the more passive Sarwa. Well aware of the fees involved in either platform, but the question for me is regarding tax on United States/Canadian/Irish based funds and stocks when purchased on these platforms.
  • I suppose Irish domiciled ETFs are the way to go to avoid 30% dividend taxes imposed by the US, so that's no issue, but is estate tax something to be concerned of should anything happen to me? Is anyone in a similar situation that can recommend to me the path to take on this? I'm worried about pumping money in the wrong direction and finding out a bit too late.

    If I were to purchase stock on the NYSE using Interactive brokers, does anyone know the implication on dividends for non-US investors? Does the 30% tax apply as well?

    If I were to purchase stock on the TSX using Interactive brokers, does anyone know the implication on dividends for non-Canadian investors?
I'm sorry to ask the basics, but the information available to me in this particular situation is hard to obtain without running into financial advisors pushing agendas here.

Does anyone have any recommendations of research to do or can point me in the correct direction?

Thank you,
Liam
mohd
Posts: 95
Joined: Wed Jul 22, 2020 2:10 am
Location: Bahrain

Re: Purchasing stocks, investing in Indexed Funds and ETFS overseas as a South African

Post by mohd »

I suppose Irish domiciled ETFs are the way to go to avoid 30% dividend taxes imposed by the US, so that's no issue, but is estate tax something to be concerned of should anything happen to me? Is anyone in a similar situation that can recommend to me the path to take on this? I'm worried about pumping money in the wrong direction and finding out a bit too late.
The estate tax is not applicable on Irlend domiciled assets. It's applicable on the "cash" that exceeds $60k in your US broker (IB) and US-domiciled assets.

For example, if you hold $200K in one of Ireland's domiciled ETFs and less than $60k in cash in your broker account, then you are safe from tax estate.
But if you hold more than $60k in cash in a US broker, then this $60k is subjected to estate tax.

Check this topic, there is valuable information by TedSwippet that could help you: viewtopic.php?p=5389159#p5389159
If I were to purchase stock on the NYSE using Interactive brokers, does anyone know the implication on dividends for non-US investors? Does the 30% tax apply as well?
As long as you are a Non-Resident Alien (NRA), your dividends are subjected to 15%-30% tax depends on your country's tax treaty.

Check this link for more info https://www.bogleheads.org/wiki/Nonresi ... n_taxation
Topic Author
LiamH
Posts: 2
Joined: Wed Jun 02, 2021 6:41 am

Re: Purchasing stocks, investing in Indexed Funds and ETFS overseas as a South African

Post by LiamH »

Amazing stuff mohd, thanks for taking the time replying and the content posted.

Cheers.
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