The ABCs of investing
How to start investing at LHV?
First, enter into an LHV client agreement and then an investment services agreement, so that you can start using the free LHV securities account service. You can then enter into additional agreements for use of services through our Internet bank. Services such as Growth Account, [Baltic Analysis]https://fp.lhv.ee/baltianalyysid) and LHV Trader are available to you.
Separate your investments from everyday transactions
To make it easier to file tax returns, we recommend separating your investments from everyday settlements right at the start. To do so, open a new bank account and designate it as your investment account.
This allows you to defer the income tax on interest from LHV Group securities received on your account.
Select the product that interests you
Use the LHV investment product screener to view our products and services and select the ones you find suitable.
Securities trading
We have put together a simple guide on placing a stock order in the Internet bank and mobile app.
Investment ideas and news
To garner investment ideas and exchange information in this field, keep an eye on the LHV financial portal. It might also benefit you to attend a free seminar in the Investment School series and read the works in the LHV Library.
Investing for a child
Start by concluding a customer agreement and then open Growth Account for your child. Once your child is older than 6 years it is possible to order him/her a LHV Youth Card to help build a nest egg through microinvesting taking place in the background.
A convenient and automated way to transfer money to the Growth Account is by standing order. No management fee is charged on this account until the child reaches the age of 26.
Read more about the LHV Youth Bank.
Investing for individuals
The state has set up an investment account system for individuals. It can be used to defer taxation of capital gains until you withdraw more money than you have deposited.
Another option is to choose the ordinary system. In this case, you will be declaring the gains from securities transactions in the previous year and paying tax on the gains annually.
Have a look at the investment account guide put together by the Ministry of Finance and read through the FAQ on LHV’s website.
Investing via a company
If you would like to use a private limited company for investment, you will have to obtain a LEI code. Keep in mind that the company’s monthly accounting must be maintained, with tax returns filed each month.
Declaring taxes
In the Internet bank you can automatically generate an investment account report and send it to the Tax and Customs Board. Compared to doing it manually, this will simplify the process of filing taxes annually.
If you have not notified the Tax and Customs Board that you are executing securities transactions through an investment account, use the tax report and enter data on to the tax return manually.
Read more about how to declare investment income on behalf of a child.
1.
I subscribed to/purchased securities
I want to use the investment account system and defer my income tax liability
When using the investment account system, you will have to declare in your income tax return all cash contributions and disbursements concerning the account marked as the investment account, as well as securities income received in the account from abroad on which income tax has been withheld (incl. dividends). Therefore it is reasonable to keep everyday transactions and securities transactions in separate accounts. Under the investment account system, you do not need to separately declare your securities purchases, sales or subscriptions. Going forward, you will have to submit an income tax return annually even if there will be no movement of money in or out of your investment account.
I want to use the ordinary system and pay the tax immediately
The ordinary system requires you to declare all securities sales and investment income received in the previous year (incl. dividends received from abroad, regardless of whether the income tax on dividends has been withheld or not). You do not have to declare purchase transactions or subscriptions.
2.
I sold securities
I want to use the investment account system and defer my income tax liability
When using the investment account system, you will have to declare in your income tax return all financial contributions and disbursements concerning the account marked as the investment account, which is why it is reasonable to keep everyday transactions and securities transactions in separate accounts. You do not need to declare the sales of securities separately. Going forward, you will have to submit an income tax return annually even if there will be no movement of money in or out of your investment account.
I want to use the ordinary system and pay the tax immediately
The ordinary system requires you to declare all securities sales and investment income received in the previous year (incl. dividends received from abroad, regardless of whether the income tax on dividends has been withheld or not). The income tax obligation arises once you have earned a profit as a result of all sales transactions or if you have received investment income (incl. dividends) on which income tax has not been withheld. However, if you have incurred a loss during the year, you can carry that forward to the following year.
3.
What else should I bear in mind if I carried out securities transactions on behalf of a child?
A child’s investment income must be declared in the income tax return, when
- the child’s account has been added to the investment account system;
- securities income (including dividends) from abroad has been received in the child’s account;
- the child’s account contains taxable profit or a loss, which you want to carry forward to the next year;
- the child’s annual income (including income from investments) exceeds 6,000 euros.
4.
I inherited/received securities as a gift but have done nothing with them
I want to defer my income tax payment
If you want you may declare securities inherited/received as a gift in the investment account system. This way, you can reinvest the money received from the sale without the obligation to pay income tax in the meantime. When using the investment account system, you will have to declare in your income tax return all financial contributions and disbursements concerning the account marked as the investment account, which is why it is reasonable to keep daily settlements and securities transactions in separate accounts. You do not need to declare the securities transactions separately.
I want to pay income tax immediately
Please note that securities inherited/received as a gift do not have an acquisition cost for you (the purchase price is 0 euros). If you start selling the securities that you have inherited/received as a gift, you need to take into account the fact that you will have to pay income tax on the total amount. Transactions must be declared in the income tax return for the year in which the proceeds of the sale are received.
5.
I inherited/received securities as a gift and I have sold them
I want to defer my income tax payment
If you want you may declare securities inherited/received as a gift in the investment account system. This way, you can reinvest the money received from the sale without the obligation to pay income tax in the meantime. When using the investment account system, you will have to declare in your income tax return all financial contributions and disbursements concerning the account marked as the investment account, which is why it is reasonable to keep daily settlements and securities transactions in separate accounts. You do not have to declare the securities transactions separately.
I want to pay income tax immediately
Please note that securities inherited/received as a gift do not have an acquisition cost for you (the purchase price is 0 euros). If you sold the securities, you must take into account the fact that you will have to pay income tax on the total amount.
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