International Lifestyle: UK ( until mid 2023), Netherlands (mid 2023 - mid 2025), Germany (mid 2025 - long term)
Emergency funds: Six months expenses
Desired Asset allocation: 8k - 10k GBP per year into passively managed index funds (80% stocks / 20% bonds)
A non UK/EU/US national here, currently living in UK. Because of my job in academia, I am moving from the UK to the Netherlands in mid 2023. And in mid 2025, I will move to Germany permanently. I plan to invest (long-term) the modest savings I have made, and after reading literature, I have found it best to create a 2 or 3 fund portfolio with Ireland domiciled UCITS ETFs.
I am undecided whether to go for an accumulating or distributing ETF because of different taxation situation in the countries where I am moving. Here is my understanding, please correct me if I am wrong:
- UK has capital gains tax even when not distributed, so going accumulating ETFs can be a not so easy task while filing tax returns. Distributing ETFs might be an easier option. Note: Since I am leaving the UK in 6 months, I do not plan to make use of the tax sheltered options available to the UK residents.
- Netherlands doesn't have capital gains tax, and it is seems to be convenient to hold accumulating ETFs. Claiming tax returns on distributing ETFs dividends seems to be complicated and time consuming, apparently a 6-8 months wait time. I am also eligible to have the 30% tax benefit as an expat in the Netherlands.
- Germany has capital gains tax, distributed or not. It might be therefore convenient to hold distributing ETFs.
Do you have any suggestion as to what I should do in this scenario?
Should I buy distributing ETFs now, sell it when I leave UK and buy equivalent accumulating ETFs when I move to the Netherlands? And similarly, sell those accumulating ETFs when I leave the Netherlands and buy equivalent distributing ETFs when I move to Germany? This feels very daunting and I am unsure if this is the most efficient way to handle the situation. I am partly tempted to just go ahead with distributing ETFs and see how it goes with the taxes in the Netherlands.
Furthermore, would IBKR be a good choice of a brokerage platform in my case? Are there other equally good/ better options?
I would very much appreciate any pointers or tips from you