facebookWhat are some of the reasons people buy S&P500 listed on the US market and subject themselves to 30% withholding tax? I understand that Ireland domiciled ones only have 15% tax.? - Seedly

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Anonymous

21 Sep 2020

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Robo-Advisors

What are some of the reasons people buy S&P500 listed on the US market and subject themselves to 30% withholding tax? I understand that Ireland domiciled ones only have 15% tax.?

I am keen to buy on kristal.AI due to no transactional fees for first 50k investments, but they only have SPY which is listed on US stock exchange. Advice please.

Discussion (5)

What are your thoughts?

Hey... they do have an Ireland-domiciled ETF that tracks the S&P500 Index - ie CSPX. However, please do note that the barrier of entry for that ETF is appx $3k USD.​​​

Rahul Wadhwa

Rahul Wadhwa

21 Sep 2020

Student Ambassador 2020/21 at Seedly

Hi Anon,

If you're looking to trade frequently (move in and out of the market freqently), the US markets would be a better choice for the reasons Ethan mentioned, i.e. better liquidty, tighter spreads and lower commissions

However, if you're in for the long run, the benefit of lower witholding tax will definietely outweigh the cost of the higher expense ratio of Ireland-domiciled ETFs.

To purchase Ireland-domiciled ETFs, you would need access to the LSE or other European exchanges. Currently, the cheaper brokers I am aware of that have access to these exchanges are Saxo and IBKR.​​​

Hi Anon,

The tax only applies only to dividends and not capital gains, I think most people who buy ...

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