I would like to invest in ETF Index funds. Vanguard funds have cheapest MER, around 0.2% and it was my initial choice, but then I've learned about some tax complications which I still don't understand.
Could somebody explain to me, which option is better for a UK-based investor: VOO (VG S&P 500 ETF) - expense ratio of 0.06% Hypothetical SP500 tracker listed on LSE with expense ratio of 0.35%
What I don't understand is the difference in tax situation for both investments.
From what I have gathered so far: US dividend tax for non-resident aliens is 30% (but down to 15%, because of UK-US tax treaty) CGT in UK is 18%
There is new legislation (FACTA) coming up in 2013. How will it affect the situation? Is there anything else I need to know?
Since I lack even basic knowledge in the tax area, could somebody please tell me how much I'd pay in the following hypothetical scenario:
Invest £10k in US ETF (VOO, expense ratio of 0.06): It goes up to £11k. How much will I have after taxes and expenses?
Invest £10k in UK ETF that tracks SP500, with expense ratio of 0.35% It goes up to £11k. How much will I have after taxes and expenses?