# Ark Life - AIB Savings Incentive Plan - tax help please



## stevieob (25 Jan 2013)

When my SSIA was finished, AIB sold me a lemon, so I naturally trusted them and invested a good chunk of my SSIA back in with them and continue to top it up every month ever since.  Of course, it was never valued at anything like what I've put into it over the years.

Then to sting me in the tail, in 2009, the Govt added and extra 1% onto my monthly contribution for stamp duty.

Until recently that is.  Now it is worth slightly more than what I've put in, not a lot, but it is not a loss anymore!

However, it tells me what I have put into it, what the fund is worth both before and after tax.  What tax?  I'm guessing it could be capital gains tax, but I don't know.  I doubt it is DIRT.  Does anyone know?

The value after tax is only 64% of the gain, a taxable sum of 36%.  CGT is now at 33%.

Then there is the issue of the annual allowance of the first €1,270 gain not being subject to CGT.

Can anyone help, and sould the fact that I'm paying stamp duty on my monthly investment have any impact on the tax charge?


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## leroy67 (25 Jan 2013)

You invested in an equity based SSIA which was written as a life insurance policy. Your tax liability is calculated using exit tax which is 36% and is payable on any gains you have made.


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## stevieob (25 Jan 2013)

thanks for clearing that up.  It wasn't an equity based SSIA though, I just did a cash based SSIA and this was done after the SSIA finished, I just used my SSIA funds to start it off.

So I take it then it does not qualify for any kind of relief at all or does it?


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## leroy67 (25 Jan 2013)

stevieob

your initial investment may well have been a standard SSIA but when you reinvested it I assume it was stock market related as you have said the value fell and has only recently started to show a gain, that is what I mean by an equity based (stock market related) investment. 

No it doesn't qualify for any form of relief, tax is taken on gains when you exit the fund or after 8 years if your money remains invested


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## stevieob (29 Jan 2013)

leroy67 said:


> stevieob
> 
> your initial investment may well have been a standard SSIA but when you reinvested it I assume it was stock market related as you have said the value fell and has only recently started to show a gain, that is what I mean by an equity based (stock market related) investment.
> 
> No it doesn't qualify for any form of relief, tax is taken on gains when you exit the fund or after 8 years if your money remains invested


 
Thanks Leroy.

Now this is interesting about the 8 years.  It is now in almost 6 years and I don't actually intend to take it out anytime soon.  So how do they take the tax out?  What happens if after they charge me tax, it starts to loose money again?  Do they take tax every year then or do they wait another 8 years?


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## leroy67 (29 Jan 2013)

another 8 years, or until you make a partial or full withdrawal, remember tax is only on gains, if it loses value after you have been charged tax that's unfortunately tough


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## stevieob (30 Jan 2013)

leroy67 said:


> another 8 years, or until you make a partial or full withdrawal, remember tax is only on gains, if it loses value after you have been charged tax that's unfortunately tough


 
Thanks again Leroy.  Seems mighty unfair.  Any loophole around this I wonder....


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## leroy67 (30 Jan 2013)

You can always encash it now, pay a small amount of tax on the gains as you are only marginally ahead of what you put in and reinvest in State Savings which are not liable for DIRT.

Upsides are a guaranteed return via a low risk investment strategy with no tax liability.

Downside, whilst returns and capital are guaranteed they are much lower than what may be obtained within a managed fund (where you are at the moment) a lot of which (not all before anyone points out ) have done very well since March 09 when the markets started to recover.

A lot will depend on your attitude towards risk andwhat time frame you wish to invest for. Speak with an independent advisor as AIB can only offer you one companies products.


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