Vanguard index funds and bonds

[Mover1]

Hi,

 

Does anyone here invest in Vanguard index funds and bonds? I'm trying to find the best way to invest in Vanguard while in Thailand but i'm not getting much help from them. 

 

Cheers,

Mover1

[Oxx]

Which Vanguard country? US, UK, or elsewhere?

 

And what is your nationality?

[Mover1]

Hi Oxx, i'm from the UK but been in and around Thailand since March this year, and won't be going back for at least 5 years. This is what's making things complicated, as i don't whether i'm classed as a UK or Thai resident where investing is concerned..?

[Oxx]

Leaving the UK with the intention of not returning for more than 5 years is enough to make your non-resident in the UK.  Always best to let HMRC know that you've left, though, to avoid complications later.  Note that if you do return within 5 full tax years you'll be liable for capital gains tax on any disposals you make.  You become Thai resident for taxation purposes after spending 182 days/year here.  (Do check the details of what I've written, since this is all from memory, and there may be some slight mistakes.)

 

From a tax point of view, the UK Vanguard funds are going to be your best bet.  I'd suggest you open a brokerage account in Luxembourg with TD International.  All London-listed ETFs will be available to you, as will 18 Vanguard stock index funds.  (US-listed Vanguard ETFs will also be available to you, but the dividend tax situation is not particularly good for them.)

[KittenKong]

I own Vanguard ETFs (and others) through my UK broker. They have never been concerned about me being in Thailand, possibly because they have a UK mailing address for me. All their communications are in fact done online anyway.

 

I pay no UK tax on any of my holdings for the reasons mentioned.

[djlest]

good luck trying to get money out of Thailand if your income is generated here. are there any other options to purchase funds from within Thailand without having a first degree on where the money came from?

[Oxx]

13 hours ago, djlest said:

 a first degree on where the money came from?

 

I simply don't recognise your characterisation of inquiry into money source.  Having opened accounts in the UK, Guernsey, Luxembourg, Singapore and Thailand I've never been asked to provide anything more than either a simple one line statement of where my money has come from, or tick a checkbox stating the source.

[Orac]

 
I simply don't recognise your characterisation of inquiry into money source.  Having opened accounts in the UK, Guernsey, Luxembourg, Singapore and Thailand I've never been asked to provide anything more than either a simple one line statement of where my money has come from, or tick a checkbox stating the source.

I have had to provide details on two occasions over the last few years on source of funds - one was a Thai based broker.

[rak sa_ngop]

On 14/08/2016 at 9:20 PM, KittenKong said:

I own Vanguard ETFs (and others) through my UK broker. They have never been concerned about me being in Thailand, possibly because they have a UK mailing address for me. All their communications are in fact done online anyway.

 

I pay no UK tax on any of my holdings for the reasons mentioned.

The last tax year 2016/17 is the first year that the previous system of UK tax credits no longer applies.  Dividend income from UK funds is now taxable at the initial rate of 7.5 pc and more. This is for UK registered funds even if they invest overseas, as opposed to off-shore funds.

 

I hold Vanguard funds in the UK and expect to pay tax on them this year even though I have been a non resident for 27 years.

 

 

 

[KittenKong]

52 minutes ago, rak sa_ngop said:

The last tax year 2016/17 is the first year that the previous system of UK tax credits no longer applies.  Dividend income from UK funds is now taxable at the initial rate of 7.5 pc and more. This is for UK registered funds even if they invest overseas, as opposed to off-shore funds.

 

I hold Vanguard funds in the UK and expect to pay tax on them this year even though I have been a non resident for 27 years.

 

I dont pay tax on my UK dividends and bank interest because of the concession that non-residents do not have to pay any more tax than that deducted at source as long as they also forego their personal allowance.

 

I'm not aware that this has changed.

 

If it has changed then the UK can look forward to me very quickly moving all my shares and deposits to outside the UK, and I suspect that I would not be alone.

[rak sa_ngop]

22 hours ago, KittenKong said:

 

I dont pay tax on my UK dividends and bank interest because of the concession that non-residents do not have to pay any more tax than that deducted at source as long as they also forego their personal allowance.

 

I'm not aware that this has changed.

 

If it has changed then the UK can look forward to me very quickly moving all my shares and deposits to outside the UK, and I suspect that I would not be alone.

Yes, as far as I know this is still the case. It is called 'disregarded income'. As you say you have to forego your personal tax allowance.

 

Moving your shares outside the UK may not be such a smart move as many countries  automatically deduct 10 to 20 pc tax from your divided payments. Whether you can easily claim this back I don't know.

[partington]

23 hours ago, KittenKong said:

 

I dont pay tax on my UK dividends and bank interest because of the concession that non-residents do not have to pay any more tax than that deducted at source as long as they also forego their personal allowance.

 

I'm not aware that this has changed.

 

If it has changed then the UK can look forward to me very quickly moving all my shares and deposits to outside the UK, and I suspect that I would not be alone.

If you own individual shares this would be necessary, but buying funds or ETFs would eliminate the need to do this.

 

If you only buy share/bond funds or ETFs domiciled abroad (most Vanguard funds are domiciled in Ireland) they are foreign income, even if entering a UK brokerage account, and are not taxable to UK non-residents, just as Thai income would not be.

Edited June 15, 2017 by partington

[KittenKong]

2 hours ago, partington said:

If you own individual shares this would be necessary, but buying funds or ETFs would eliminate the need to do this.

 

If you only buy share/bond funds or ETFs domiciled abroad (most Vanguard funds are domiciled in Ireland) they are foreign income, even if entering a UK brokerage account, and are not taxable to UK non-residents, just as Thai income would not be.

 

Yes, perfectly true, and about half my holdings are already domiciled in Ireland (Vanguard and Ishares). I was including this in the "moving all my shares .... to outside the UK" scenario.

 

Certainly easy enough to do the same with the rest, if necessary.