Author Topic: Buying ETFs in joint or separate names?(Australia)  (Read 498 times)

life_travel

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Buying ETFs in joint or separate names?(Australia)
« on: September 04, 2017, 03:29:03 PM »
I think it's time to jump in the water and start investing :) Scary!!
Reading through the forums I see that we need to buy ETFs rather than invest in a managed fund.
Everything we own is in joint names and most of our money is in property .
It may be a silly question but how do couples ( that combine everything) invest into a market ?
We are working towards 4 months off in 2020 and mostly likely semi FIRE in 2021.
Do we buy parcels of ETFs under individual names or joint ?

steveo

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #1 on: September 05, 2017, 02:08:07 AM »
Every ETF that I purchase is in my wife's and myself's name. It's pretty easy. You just set-up a joint account with your broker and go from there.

marty998

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #2 on: September 05, 2017, 05:17:53 AM »
Best you set it all up in the name of the spouse who earns least.

Or if you are near retirement, the spouse who will retire first.

Tax can have a measurable impact on you final income results each year....

banksie_82

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #3 on: September 05, 2017, 06:15:05 PM »
Buying in one name over another is a good strategy to minimise tax.

All our shares are in my wife’s name. This is because 1. She earns less than me (enough to be in a lower tax bracket) and 2. She will take time off to have kids soon, making all dividends and capital gains tax free over that period (we are still under $18k in dividends a year).

The tricky part is working out when it’s enough in her name, and start investing in mine. Ideally, you’d set it up so that in retirement you both get a similar enough income (dividends, interest and rent) to be in the same tax bracket. This is easy with cash and term deposits, but moving shares/ETFs from one name to another incurs capital gains tax.

life_travel

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #4 on: September 06, 2017, 06:11:17 AM »
We are both working and earning $60-75 k each depending on bonuses . I earn more than DH but not by huge amount . Planning to retire together in 4-5 years with modest assets that will be earning under 18k threshold each .
Does it change your opinions ? Or is it simply a personal choice ?

steveo

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #5 on: September 06, 2017, 04:26:04 PM »
Honestly I don't worry about tax implications. I just try and do what I think is the right thing.

life_travel

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #6 on: September 06, 2017, 04:44:09 PM »
Honestly I don't worry about tax implications. I just try and do what I think is the right thing.
Thanks, honestly until 2 days ago I didn't realize that you can hold shares in joint names, dunno... No one ever mentioned it and I just assumed that it's an individual thing . Then I downloaded CMC markets app and it asked if I wanted a joint account , hence my question .
I think for us we ll just continue our joint strategy , it's reassuring to know that experienced investors  like you are doing it :)

steveo

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #7 on: September 06, 2017, 06:27:22 PM »
Honestly I don't worry about tax implications. I just try and do what I think is the right thing.
Thanks, honestly until 2 days ago I didn't realize that you can hold shares in joint names, dunno... No one ever mentioned it and I just assumed that it's an individual thing . Then I downloaded CMC markets app and it asked if I wanted a joint account , hence my question .
I think for us we ll just continue our joint strategy , it's reassuring to know that experienced investors  like you are doing it :)

At some point you retire and then having everything split may be the best strategy. I reckon to much focussing on tax implications is wasted effort.

Acastus

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Re: Buying ETFs in joint or separate names?(Australia)
« Reply #8 on: September 15, 2017, 03:22:02 PM »
We have an account that is owned in joint tenancy. All funds and brokerage transactions are owned jointly. To me, the main reason to own this way is automatic inheritance - the survivor automatically becomes the sole owner. There is no need to go through other inheritance hurdles. It just happens.

At least in the US, low cost index mutual funds are now very close in cost to ETFs. My large cap index fund charges 0.04% and there are no transaction fees. If you are adding money monthly, they can be more convenient. Not sure why you insist on ETFs, other than possibly more options at rock bottom costs.