# An Irish ISA?



## DMartin (6 Aug 2019)

When is the Irish Government going to Introduce A UK Style Investment and Savings Account (ISA) for Ordinary People.

In the UK, It is possible to save in a cash ISA, a stocks & shares ISA, an innovative finance ISA, a Help to Buy ISA, a Lifetime ISA or a mixture of all of them of up to £20,000 a year, every year with zero tax liability on any gains made on interest or the sale of the shares up to £20,000. A new £20k Investment can be made year after year after year tax free. This is an illustration of the huge gulf that exists between the taxation of UK versus Irish citizens, (Not to mention income tax and more)

Tax treatment on all forms of investment in Ireland are extremely punitive: whether it is CGT Tax on Shares, Exit Tax on funds, Dirt tax an savings, Revenue is determined to constrain our efforts to build any form of a financial nest egg. In fact, personal investing in Ireland is so penal from a tax point of view that there is a major disincentive to do so.

As an example, Owners of  ETFs in Ireland are bound to pay 41% income tax every 8 years on what is known as a deemed disposal date fabricated by Revenue regardless of whether the ETF is disposed of (sold) or not . It kills the compounding effect of holding on to ETFs beyond 8 years and ultimately the ability of a retail investor to build wealth.

The ISA system of the UK incentivises personal saving and investment by ordinary people for people who want to build wealth. For those  who want to use their investments to strengthen their purchasing power and spend it, it means that ultimately there will be more money circulating in the economy leading to a more prosperous nation.

Is there anyone in the know on this lobbying government to overhaul investment taxes to make them fairer and to incentivise investment?


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## Marc (6 Aug 2019)

.


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## GSheehy (6 Aug 2019)

DMartin,

The industry lobbying has been around the level of taxation (and the levy of 1%). They're saying that Exit Tax should be the same as DIRT.

IMHO, Exit Tax should go and the existing fund/accounts should be subject to the same tax treatment as CGT.

Government say there's no evidence that the level of taxation is affecting sales of the products, so it must be grand. And anyway, they're not being confronted on the door-steps about exit tax , so who cares.

That's the mindset. No joke.

On the ISA question - Absolutely, there should be a similar scheme here but if they can't get beyond the thinking on the above then it's a long (long) way off.


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## ashambles (6 Aug 2019)

I don't see Irish ISAs happening. 

Despite Irish Revenue copying the UK whenever it suits them, they've made no sign of copying them in the last 30 years from the time when UK PEPS were introduced by (I believe) Lawson. 

Within Revenue my opinion is there a bias against share ownership. As an example, taxes on company share schemes are punitive, to the extent that schemes such as ESPP which are no-brainers to join in other countries are often avoided by Irish employees.  I put this mostly down to Revenue rather than politicians because the detail of these schemes gets hammered out between senior revenue staff and the big accountancy firms.

Leaving aside Revenue, if a government were to try to bring in an ISA they'd be hammered for bringing a tax relief that would be portrayed to only benefit the better off, so it's also politically toxic.


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## GSheehy (6 Aug 2019)

I'd be thinking that the bias is towards property (and bank deposits and State Savings) by Revenue/DoF/Govt.

If they had proposed bringing in an ISA (type offering) alongside auto-enrollment, that might have worked.

How can a soft-compulsory long term savings be hunky-dory and a shorter term savings option be toxic.? Either they want folk to save or they don't. They need to stop using the term 'pension' (that's forever away in the future) and just focus on savings.


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## Sarenco (7 Aug 2019)

I don't think there is any prospect of an Irish ISA.

But it's not all bad for Irish savers compared to the position in the UK:-

The UK has a lifetime pension allowance of just over £1m - the effective fund threshold here is over €2m.
Irish (tax-free) State Savings products are pretty generous as a risk-free option; and
The Irish contributory State pension is far more generous than the UK equivalent.


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## RichInSpirit (7 Aug 2019)

DMartin said:


> fabricated by Revenue



I stand corrected but I think that Revenue only collect the tax that the Government decide. You should say Fabricated by Government.


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## DMartin (7 Aug 2019)

Marc said:


> I have recently published two guides one dealing with three investment solutions which achieve income tax and capital gains tax rather than gross roll up. These are most suited to investment portfolios of more than €100k and require completion of a self-assessment tax return.
> 
> 
> 
> ...



Would be happy to have a look!


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## DMartin (7 Aug 2019)

GSheehy said:


> DMartin,
> 
> The industry lobbying has been around the level of taxation (and the levy of 1%). They're saying that Exit Tax should be the same as DIRT.
> 
> ...



I agree that the general public are probably not lobbying on the door step but a sensible government would surely a agree that an ISA style scheme here would be beneficial.  A well thought out scheme combined with slick marketing campaign which this government could do would be a great product that the govt could milk in the run up to the next election and I bet there would be good uptake. Its all about sales. Great products sell. Remember the SSIA? This had the negative effect of costing the govt a fortune and reaching a maturation which saw a hemorrhaging of savings at the end of the scheme. An ISA would not need to cost like this. The net effect is that people would be wealthier. It would probably pull a lot of deposits out of the banks though.


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## GSheehy (29 Aug 2019)

DMartin said:


> It would probably pull a lot of deposits out of the banks though.



The banks are cannibalising their own deposit base (via their ILAC etc. tied Financial Advisors) with rather expensive savings/investment products, every day. 

They, or Government, would have no rational argument against something like an ISA for fear of deposit movement.


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