Doubt over classification as private investor for beginner

[donnags1964]

I am living in Switzerland and plan to start investing around 5-10k every quarter (so 1 transaction per quarter) on an ETF (something like iShares Core MSCI World UCITS ETF) through a broker. I have read that there are 5 criteria outlined by the FTA to be considered as a private investor (listed below). My concern lies on point 2: I have zero investment capital at the beginning of the tax year, so how can my transaction volume not be higher than my capital at the beginning of the year. Let’s consider I’ll put 20k through 2024 and that I meet all the other criteria. Am I missing something?

• Investment terms: You hold the securities you buy for at least six months before you resell them.
• Transaction volume: The total, combined value of all your purchase and sales made in one calendar year is not more than five times the value that your investment capital had at the beginning of the tax year.
• Main income: You do not rely on investment returns to supplement your income for your regular living expenses. The rule of thumb: Your capital gains should not make up more than 50 percent of your gross income.
• Loans: You invest your own money, and not finance your investments with money from third parties. Or: Your taxable yields like interest and dividends earned are higher than the interest paid for the use of third-party capital.
• Derivatives: You can only use derivatives, and particularly options, to hedge your own securities.

Thanks!!

 

[letthrmusixsaveyourlife]

@donnags1964 It’s a decision not a classification, as long as you don’t make a living/or use loans to make one you are fine.

 

[jarris]

@donnags1964 IANAL, but I believe you can include cash in that computation. Point 2 from the original documents, emphasis mine:

• Le volume total des transactions (somme de tous les achats et de toutes les ventes) ne représente pas, par année civile, plus du quintuple du montant des titres et des avoirs au début de la période fiscale.
• Das Transaktionsvolumen (entspricht der Summe aller Kaufpreise und Verkaufserlöse) pro Kalenderjahr beträgt gesamthaft nicht mehr als das Fünffache des Wertschriften- und Guthabenbestands zu Beginn der Steuerperiode.
• il volume delle transazioni per anno civile (somma di tutti i prezzi di acquisto e di vendita) non supera complessivamente più di 5 volte il valore dei titoli e degli averi sui conti all’inizio del periodo fiscale;

 

[seville90210]

@jarris

1. This.

But also :

• You seem that you won't sell anything this year anyway so you won't be classified as a professional, even if all your investments come from your future salaries (if you really have 0 CHF now)

 

[quant]

@donnags1964 You're quoting the second criteria wrong. It's not only the investment capital, but ALL capital. So if you have 100k in cash, you can have a transaction volume of up to 500k before it triggers.

See here: https://www.estv.admin.ch/dam/estv/....pdf.download.pdf/dbst-ks-2012-1-036-d-de.pdf