UCITS Tax Drag Calculator
Compare entered fund and investor withholding assumptions for US and Ireland fund scenarios.
How it works
Enter the underlying US equity dividend yield, total return before modeled withholding, investment period, and principal. Enter the US and Irish fund withholding assumptions. Choose fund only mode or enter investor withholding assumptions for the selected residency.
The US case treats dividends as paid in cash each year. The Irish share class selector controls whether the investor withholding layer applies to cash distributions. Both fund cases retain their fund withholding assumption. The tool compounds each case using its modeled annual return.
Choose which domicile is the reference for the displayed difference. The difference is the other ending value minus the reference ending value. A positive number means the other modeled value is higher under the inputs shown.
Change one assumption at a time to see how it affects annual drag and ending values. Compare actual fund documents and tax guidance separately because this model does not identify a suitable fund or determine your tax treatment.
Step by step
- Enter the dividend yield, underlying return, principal, and years
- Enter visible fund withholding assumptions and choose an investor tax mode
- If included, enter investor rates and select the difference reference
Worked example
Enter a $100,000 investment, 2% dividend yield, 8% underlying annual total return, and 10 years. Set the US fund withholding rate to 0%, the Irish fund withholding rate to 15%, and choose fund only mode. The Irish share class can be accumulating or distributing because investor level rates are excluded in this example.
The model shows a 0% annual US drag and a 0.30% annual Irish drag. The estimated ending values are $215,892.50 for the US scenario and $209,969.90 for the Irish scenario, a difference of −$5,922.60 with the US scenario selected as the reference.
When to use this calculator
Use this calculator to compare a US fund scenario with an Irish fund scenario when you want to test explicit dividend withholding assumptions over time.
Use fund documents and tax guidance to determine which assumptions apply. The calculator does not select rates or recommend a domicile.
Common mistakes
Do not use a published fund return that already reflects the withholding being modeled as the underlying return. Do not treat the residency selector as a rate lookup. Confirm whether a return series is before or after fund level withholding before comparing it.
Do not read the higher modeled ending value as a fund recommendation. The comparison does not account for each fund’s holdings, fees, tracking, liquidity, investor eligibility, or complete tax position.
How the calculation works
Fund drag (%) = dividend yield (%) × fund withholding rate (%) ÷ 100
Investor drag (%) = remaining dividend yield (%) × investor withholding rate (%) ÷ 100
Annual modeled return (%) = underlying total return (%) − fund drag (%) − investor drag (%)
Ending value = principal × (1 + annual modeled return ÷ 100) ^ years
The US scenario assumes an annual cash dividend. For Ireland, the investor layer is applied only when the selected share class distributes. Fund rates apply to the ordinary US equity dividend exposure represented by the entered yield. This is a manual scenario model, not a treaty rate table.
Limitations and assumptions
This comparison models ordinary US equity dividend exposure using rates entered by the user. It does not estimate a country’s treaty rate, foreign tax credit, personal tax on retained income, fund expenses, capital gains tax, estate tax, currency costs, account rules, or securities lending. The Irish accumulation case is not tax free: personal tax on accumulated income is excluded. Results also depend on the entered return being before the modeled withholding.
Key terms
- Fund withholding rate
- The entered percentage of the ordinary US equity dividend yield withheld inside the fund before the investor layer.
- Investor withholding rate
- The entered percentage applied to the dividend remaining after fund withholding when investor taxation is included.
- Accumulating share class
- A share class that reinvests cash dividends within the fund. This model excludes investor tax on accumulated income.
Compare related tax questions
Use the Dividend Tax Comparator for a separate US federal dividend income tax scenario that compares qualified and ordinary dividends. This page models withholding inside a fund and, when selected, a separate investor withholding layer.
The Double Taxation Treaty tool supports limited sourced examples and manual rate comparisons. It does not automatically supply rates to this calculator, which uses only the assumptions entered here.
FAQ
What does the fund withholding rate represent?
The model applies an entered fund withholding rate to the dividend yield. That rate represents withholding on the fund’s US equity dividends, not tax on all fund income. This tool does not assume a treaty rate for a country.
How does the Irish share class setting affect the model?
The US scenario assumes an annual cash distribution, so its investor rate applies each year when investor taxation is included. The Irish share class can accumulate or distribute. Its investor rate applies only to a distributing class, while Irish fund withholding applies to both policies.
How are fund and investor rates combined?
Fund withholding is applied first to the underlying dividend yield. An included investor rate then applies to the dividend remaining after fund withholding. For example, a 15% fund rate followed by a 10% investor rate removes 23.5% of the original dividend, not 25%.
What does the annual drag and final value difference mean?
The annual drag is subtracted from the entered underlying total return before compounding. The underlying total return must be before modeled withholding. A published NAV return may already reflect withholding, so subtracting withholding from that return again can double count it. Net cash distributions are assumed to be reinvested, so both annual returns compound.
How should I read the comparison difference?
The displayed difference is the other ending value minus the selected reference ending value, using the same principal, yield, return, horizon, and entered rates. It is a result of this simplified model, not a recommendation or a tax forecast.
Related tools
Use the Dividend Tax Comparator for a separate US federal dividend income tax scenario comparing qualified and ordinary dividends. The Double Taxation Treaty tool supports limited sourced examples and manual rate comparisons, not automatic rates for this comparison.