2G·

Oh man....

$TDIV (-0,33%) Why on earth is withholding tax payable? I started saving in the ETF as a savings plan for my children. Now I was looking forward to the latest distribution, only to realize that the distribution will be reduced by the tax. Sorry, had to get rid of that for a moment. Yes, it annoys me. Yes, it's my own fault. I probably should have found out beforehand.

What now? What would you recommend? Continue to save or stop and use the €25 per child for the $VWRL (-0,98%) and increase the existing savings installment from €25 to €50?

32 Commenti

Dividenden Dompteur@Dividenden_Dompteur

Withholding tax applies because it is levied in the Netherlands. If the tax-free amount is not exhausted, this is a disadvantage; if it is exhausted, it is an advantage (solidarity surcharge is not calculated on the withholding tax, but only on the remainder). I have this in my own custody account, but have the $VWRL for my daughter. Makes more sense here, especially in the savings phase, otherwise you leave too much return.

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DTA@trade_commander_2498

@Dividenden_Dompteur Thank you. Honestly. It'll be out for me. My kids have a 1000€ tax-free allowance. Why should I pay withholding tax then?

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Dividenden Dompteur@Dividenden_Dompteur

@trade_commander_2498 That's why I have the $VWRL in the distributing version for her. She's still using the tax-free amount for now and when the custody account is transferred to her at 18, it might be a good idea to make a distribution every 3 months so she can see what investing can achieve and doesn't get the idea of throwing the party of her life 😜

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DTA@trade_commander_2498

@Dividenden_Dompteur ah ok. Yes, I have to take the accumulated variant. At Trade Republic you get the TER back or it is invested in the ETF on a monthly basis. There was only the variant to choose from.
But I like your plan.
I also thought that the distribution was an advantage. But not if I still have to pay tax, even though that wouldn't be necessary.

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Dividenden Dompteur@Dividenden_Dompteur

@trade_commander_2498 I have my children's custody account with ING, but I can understand the offer from Trade Republic. It's just a question of how long they have this offer. My daughter is 4, so I still have 14 years of investing ahead of me.

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BockaufDividenden@BockaufDividenden

@trade_commander_2498 Just for your information. If the junior custody account is in your child's name, then each of your children has €1,000 + BASIC FREE CONTRIBUTION tax-free. This means around €12,000 per year.

Look for a non-assessment certificate, which you submit to the tax office every 2 years. This allows you to trade significantly more securities for your child without paying taxes :)

Because every natural person is subject to the same basic tax-free amount.

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KevinE@KevinE

23H

@BockaufDividenden From a certain amount (<€12,000 p.a.), however, CT is payable for the child.

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BockaufDividenden@BockaufDividenden

11H

@KevinE If you mean contributions to statutory health insurance, then it is from €6,420 or more than €535 per month. That's right, then unfortunately GKV contributions are due ...

Nevertheless, you can still sell €6,419 p.a. tax-free and buy a new one.

And if it's really worth it, then just pay the GKV contribution if you really trade so well for the junior portfolio and make <€12,000 profit p.a.

;)

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KevinE@KevinE

@BockaufDividenden My (so far only planned) child will certainly not get that much money. If I end up with 10-15k (adjusted for purchasing power), that should be enough to get me started.

I can always add more.

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BockaufDividenden@BockaufDividenden

@KevinE Just as a suggestion: even if the child ends up with €10,000+, you should REALIZE it and make a new purchase so that you have the tax-free capital gains without having to pay tax on the transfer at the age of 18.

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MartinB@Martin_b

$VWCE is the accumulating version, so you pay even less tax. It's the exact same etf, but no divvies.

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DonaldTruck@DonaldTruck

@Martin_b I see it differently with low distributions over 10-18 years. That way, you at least take part of the tax-free amount with you.

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MartinB@Martin_b

@DonaldTruck I see it like that as well. OP mentioned tax as a point of inconvenience for him, so I took that as a point to optimize on based on his choice for the growth ETF. Me, I would not be too bothered about creating a taxable event.

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Cekay@CMustermann

@Martin_b What? no? That's completely false.

$VWCE is the normal All-World index by FTSE, $TDIV is a dividend lead ETF, focussing on "quality" dividend stocks.

4 highest allocations
$VWCE is 12% tech, 10% software, 8% banks and 7% hardware.
$TDIV is 30% banks, 14% pharma, 9% insurance and 8% petrol

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MartinB@Martin_b

@CMustermann It's not false. $VWCE is the accumulating version of $VWRL .I think you misinterpret my previous comment.

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Cekay@CMustermann

@Martin_b ah, yes I see. Could have interpreted the OP both ways. Sorry!

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MartinB@Martin_b

@CMustermann it's all good!🙏

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Steffen@Maveric2005

The actual tax burden is only 17.64% in contrast to 18.46% in Ireland or Germany. I don't understand the problem with withholding tax because it is taken into account.

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Dividenden Dompteur@Dividenden_Dompteur

@Maveric2005 However, the Netherlands deducts the 15%, even if you have not yet exhausted the tax-free amount. In this case, you are at a disadvantage.

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Oleg@ScorpionfromBW

@Dividenden_Dompteur can be reclaimed via the tax return without any problems, so that's complaining at a high level

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Dividenden Dompteur@Dividenden_Dompteur

@ScorpionfromBW Are you doing a tax return for your child because of a few euros?

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BockaufDividenden@BockaufDividenden

@Dividenden_Dompteur I'm right there with you. It's all just cumbersome, complicated and every country has its own withholding tax - annoying!
The EU should hurry the hell up, they want to harmonize it for all countries somehow

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Oleg@ScorpionfromBW

@Dividenden_Dompteur Oh well, it's about the child. Then I would rather take an accumulating ETF. Then why use distributors? Because of a few € FSA?

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Seventrader@7Trader

I can sympathize.
But take comfort in the fact that you're not Austrian - so you'll be gently fooled 🤗

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ShrimpTheGimp🦐@ShrimpTheGimp

Personally, I don't think much of $TDIV. It is somehow seen as the holy grail of dividend ETFs. Even though its performance has been really great in recent months... but for me it has the following problems:

- low diversification
- financial overweight
- "relatively" expensive
- poor TD
- withholding tax issue

Personally, I would take $VWRL or $SPSA for your children if a distribution plays a role. But I would do without a dividend ETF. Or you could add $VHYL (75/25), for example. That would also be a useful setup :) But to each his own 😉 but it's great what you're doing for your children. Many parents could take a leaf out of your book 👍

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DTA@trade_commander_2498

@ShrimpTheGimp

Top, thanks for your answer. It really is like that. I will correct my approach.

And thank you very much. That's a nice compliment so close to sleep 🙏

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Demas@Demas

@ShrimpTheGimp the diversification is great. Look at the countries. And sectors are also very good diversified

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ShrimpTheGimp🦐@ShrimpTheGimp

@Demas 100 companies and 40+% finance? Has little to do with country allocation 😬 but to each his own

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Demas@Demas

@ShrimpTheGimp It's the most diverse dividend ETF out there. I haven't seen any others.

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ShrimpTheGimp🦐@ShrimpTheGimp

23H

@Demas oh man, compare it with $VHYL you will see the difference 🙈

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Stevoo@Stevoo13

@ShrimpTheGimp 40% USA is diversified for you? Not to mention the lower returns... Honestly, $TDIV is probably THE best all-around ETF on the market, aside from $SCHD (US only).

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asset_whisperer_3145@asset_whisperer_3145

As a beginner, I was not aware of the withholding tax on the ETF. Can anyone tell me how to offset this 15% against the withholding tax in Austria? Do I really have to reclaim it via the NL tax authorities? Thanks for the help

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