# Can I combine the 8 Year roll-up tax on EFT's



## nodo (26 Jun 2015)

I will have 5 or 6 ETF's due for the roll-up tax over the next few months. Rather than pay as they become due , I wonder if I can pay all before a certain date and avoid any penalties ( as can be done with Capital Gains Tax for example). Will be grateful if anyone can advise me. Thanks, Nodo


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## jpd (29 Jun 2015)

The tax is only due once a year in November not on the anniversary date of the purchase. The value on the anniversary date determines the amount of tax.


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## nodo (29 Jun 2015)

Thanks, jpd . That's exactly the answer I hoped for , pretty similar to CGT . Thanks for your information. nodo


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## landlord (29 Jun 2015)

Are you referring to the eight year gross roll up tax due on EU/Irish ETFs.  I am about to purchase a few of these for the first time and I'm wondering how you go about paying the 41% tax.  If you purchase them now in 2015 do you pay the 41% tax on the profits in November 2023 and then file the payment for the 2023 tax year (the following year) ?


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## Boyd (29 Jun 2015)

landlord said:


> Are you referring to the eight year gross roll up tax due on EU/Irish ETFs.  I am about to purchase a few of these for the first time and I'm wondering how you go about paying the 41% tax.  If you purchase them now in 2015 do you pay the 41% tax on the profits in November 2023 and then file the payment for the 2023 tax year (the following year) ?



Received from revenue directly:

You do not need to complete a Form 11 on each occasion that you have a deemed disposal, rather you will total all payments and/or all gains for the year of assessment and enter the relevant details at (a) – (f) of line 319 of Form 11 and submit the return and payment in the October following the year of assessment.  See page 1 of Form 11 for further details in relation to filing/payment dates. 

If, say, you commence purchasing ETFs on a monthly basis in June 2015, by the end of 2015 you will have 7 different ETFs.  If you hold these investments for 8 years, you will return the total of the deemed disposals of the 7 ETFs on the various dates in 2023 in you tax return in 2024.  And so on for subsequent purchases.


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## landlord (29 Jun 2015)

Thanks U 123
 Revenue have made it clear that you file all of them on one form 11 but it doesn't seem to be clear to me whether you are liable for the 41% tax for each individual ETF on the exact day the eight years is up, or whether you can just tally them all up that year and pay them all in one lump sum  similar to capital gains payments.


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## Boyd (29 Jun 2015)

I dont think I follow. It says above that you total the gains on the various dates, and return them the next year. AFAIK you cant offset loses again gains if thats what you're wondering about...

So you add up all the gains on each date, take 41% of that and pay that?


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## landlord (30 Jun 2015)

username123 said:


> You do not need to complete a Form 11 on each occasion that you have a deemed disposal, rather you will total all payments and/or all gains for the year of assessment and enter the relevant details at (a) – (f) of line 319 of Form 11



 Sorry for the misunderstanding but isn't Revenue here just telling you how you go about filling out the form 11 which is done the following year, rather than telling you how you make the payments  
  So my question is If I purchase 1 EU UCITS ETF a month until the end of the year (I.e. In , ,  etc....), I become liable for the 41% tax in 8  years time. 
Do I pay the 41% tax on exactly 8 years to the day that I purchased each ETF i.e. on the , , etc.... I.e. making a separate payment each month, or can I pay the whole lot for that tax year in one go.


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## Boyd (30 Jun 2015)

Ah OK I get it. I'm not sure, perhaps you should email them and let us know?


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## landlord (30 Jun 2015)

I emailed them yesterday I have a contact in revenue who works  specifically with ETF's.  Will update soon....


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## landlord (30 Jun 2015)

This is an email back from my revenue ETF source ....

"If you hold the ETFs for 8 years you will be subject to the deemed disposal provisions.  You do not need to complete a Form 11 on each 8th anniversary, rather you will total any gains from each ETF for the calendar year (2023 in your example) and enter the details at line 319 of Form 11 and submit the return and payment in the following October.  You do not need a separate Form 11 for each ETF.  If there is a loss in any of the ETFs, it is treated as a Nil gain and you cannot reduce any gains by such a loss.  If you sell an ETF before you have held it for 8 years, then the deemed disposal provisions will not apply.  When you sell an ETF or part of an ETF, you must calculate any gain arising and return it on Form 11 appropriate to the year of the sale."

 So it seems in my earlier example and in the same example I gave to Revenue you total up all your gains in 2023 but you don't pay the 41% or file (form 11) until the following year!!!
 So it appears in reality it is actually nine years from purchase before you pay and file.


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## nodo (30 Jun 2015)

Very useful info landlord , thank you, ( and your revenue source ).

If my (limited ) information is correct , treatment of non EEC domiciled ETF's are  different , these seem now to be treated the same as shares --- no 8 year roll up, CGT payable on sale , losses allowed against any gains . As a downside , interest seems to be liable for 41% tax , plus USC and PRSI.

Thanks again for this information.   Nodo.


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## Boyd (30 Jun 2015)

Great info Landlord. Having re-read this thread I realise I am confused about a rather important point. Im a PAYE worker, and have never done a form 11 or self declared anything, so apologies if the following question is very stupid....but how do I actually pay the money to Revenue? AFAIK filling out the form 11 is just declaring it, but how does the money actually move from my bank account into Revenue's? Is it deducted from my tax credits in the following year or what?

I did say it was a silly question


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## landlord (30 Jun 2015)

username123 said:


> Great info Landlord. Having re-read this thread I realise I am confused about a rather important point. Im a PAYE worker, and have never done a form 11 or self declared anything, so apologies if the following question is very stupid....but how do I actually pay the money to Revenue? AFAIK filling out the form 11 is just declaring it, but how does the money actually move from my bank account into Revenue's? Is it deducted from my tax credits in the following year or what?
> 
> I did say it was a silly question



This is an excellent question...I am also a PAYE worker however I use a form 11 due rental income. But I will be investing in my other halfs name who like you is a PAYE worker who has never filled out a form 11. I have recently registered her for ROS, for paying CGT and am wandering if this is a necessary step to eventually filing a form 11 for her.  I am dreading filling out an entire form 11 (its  v.v. long) just to declare exit tax relating to sale of ETFs!!! Will look into this soon !!

In terms of actually paying it there are 2 ways.
1. Through ROS you can use your debit card.
2. Through ROS you can set up your bank account details and instruct them to take the money out.


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## landlord (30 Jun 2015)

nodo said:


> Very useful info landlord , thank you, ( and your revenue source ).
> 
> If my (limited ) information is correct , treatment of non EEC domiciled ETF's are  different , these seem now to be treated the same as shares --- no 8 year roll up, CGT payable on sale , losses allowed against any gains . As a downside , interest seems to be liable for 41% tax , plus USC and PRSI.
> 
> Thanks again for this information.   Nodo.



I think you might be getting confused....or I am misunderstanding your post...
Have a look at this thread I posted on the summary of the costs involved in investing on the stock market.
This was all new to me a few months ago too!!!

http://www.askaboutmoney.com/threads/summary-of-stock-market-investment-costs.194304/#post-1433608


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## Boyd (30 Jun 2015)

landlord said:


> This is an excellent question...I am also a PAYE worker however I use a form 11 due rental income. But I will be investing in my other halfs name who like you is a PAYE worker who has never filled out a form 11. I have recently registered her for ROS, for paying CGT and am wandering if this is a necessary step to eventually filing a form 11 for her.  I am dreading fill out an entire form 11 (its  v.v. long) just to declare exit tax relating to sale of ETFs!!! Will look into this soon !!
> 
> In terms of actually paying it there are 2 ways.
> 1. Through ROS you can use your debit card.
> 2. Through ROS you can set up your bank account details and instruct them to take the money out.



Cool, thanks for that. It only dawned on me today about that!! Im not registered for ROS at the moment (I am for PAYE online), so will need to look into that.


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## Joey101 (14 Jul 2015)

landlord said:


> "....When you sell an ETF or part of an ETF, you must calculate any gain arising and return it on Form 11 appropriate to the year of the sale."



Hi landlord,

Thanks for the helpful info around the payment of tax on ETFs. I disposed of some shares in an ETF a few months ago so am due to pay tax on the gain at 41% this year. However all of the forms on revenue.ie are related to 2014 still? I assume the forms will be updated closer to October. I wonder whether the whole form will need to be filled out or just section 318 (e) for the actual disposal. [On a side note I believe Section 408 (a) is more appropriate for deemed disposals after 8 years]

According to [broken link removed] on revenue.ie, returns are due by 31 July for any chargeable events between 1 January and 30 June..... yet there are no 2015 forms available online.

As clear as mud then!


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## landlord (14 Jul 2015)

Joey101 said:


> Hi landlord,
> 
> Thanks for the helpful info around the payment of tax on ETFs. I disposed of some shares in an ETF a few months ago so am due to pay tax on the gain at 41% this year. However all of the forms on revenue.ie are related to 2014 still? I assume the forms will be updated closer to October. I wonder whether the whole form will need to be filled out or just section 318 (e) for the actual disposal. [On a side note I believe Section 408 (a) is more appropriate for deemed disposals after 8 years]
> 
> ...



Hi Joey,
Firstly I am assuming, because you re talking about 41% tax you must have disposed or partially disposed of EU domiciled (UCITS) ETFs?
This year all you need to do is tally up all your gains from disposal of all EU domiciled (UCITS) ETFs
Then next year you must BOTH pay and file via form 11.
The reason why all the forms on revenue are for 2014, is because you file the following year.
When you file next year (for the ETFs you sold this year) you will be looking for the 2015 form 11.

Actually sorry when re-reading your post again, when you said you disposed of some ETFs a few months ago were you referring to disposal before 1st Jan 2015?


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## Boyd (1 Sep 2015)

Just thinking about this again............I dont entirely follow how you calculate tax when you actually physically sell the ETFs (not deemed disposal).

Very simple example - say you buy 100 units of a IWDA ETF in January 2016 and another 100 in June 2016. Say January batch cost E100 per unit while the June batch only cost E50 per unit, due to huge market drop. Lets say its now January 2017 and you decide to sell half of your position in the ETF (i.e. 100 units). You can sell the each unit at E200 as the price went through roof at end of 2016. What tax do you pay? You have sold at 100 units at E200 each = E20, 000 but how do you determine the price at which you bought the ETF units just sold, in order to calculate the tax due?

On my broker (Degiro), you cant seem to sell explicit units of ETF bought at a particular time (as far as I can see anyway). Rather, if you own the above 200 units, you say "sell 100 units out of my holding in IWDA" you dont say "I want to sell the 100 units of IWDA I bought on June 20th".

Hence, I'm not entirely sure I follow how you calculate the appropriate purchase price. This would make much more sense if you were selling physical shares with a certificate which had the purchase price stamped on them, and its clear when selling them how much they actually cost.

Here is sample screenshot from Degiro which shows the position in IWDA ETF. The number column is the total number of units you own in IWDA, independent of when you bought them:


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## Joey101 (1 Sep 2015)

Well, certainly for the disposal of shares under CGT, the first in first out rule applies so I imagine the same rule exists for exit tax

http://www.revenue.ie/en/personal/buy-sell/shares.html#section3


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## Marc (1 Sep 2015)

,


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## Boyd (1 Sep 2015)

Joey101 said:


> Well, certainly for the disposal of shares under CGT, the first in first out rule applies so I imagine the same rule exists for exit tax
> 
> http://www.revenue.ie/en/personal/buy-sell/shares.html#section3



Oh I didnt know that, makes sense! Thanks


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## jpd (1 Sep 2015)

It is my opinion that you can choose either method 1) FIFO or 2) Average cost to calculate the gain made on disposal ETF by ETF.

Once you have chosen a method for the ETF, you have to stick with it for future disposals.


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## landlord (1 Sep 2015)

Why not get the correct info from the horses mouth....as they say.

http://www.revenue.ie/en/about/publications/exchange-traded-funds-guidance-note.pdf

Above is the new revenue guidelines about ETFs..... 
At the bottom of this PDF are 2 revenue contacts.
I have personally both emailed and spoke to Susan (one of the contacts) on the phone who seems to be very knowledgeable and gave me great advice....
I would highly recommend anyone who has any queries about ETFs to contact her.
It was Susan who told me that although you tally up your gains in the eighth year, you do not pay and file until the ninth year!!!


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## Boyd (2 Sep 2015)

landlord said:


> Why not get the correct info from the horses mouth....as they say.
> 
> http://www.revenue.ie/en/about/publications/exchange-traded-funds-guidance-note.pdf
> 
> ...



Good call, contacted Susan and she confirmed you can use FIFO or averaging. She suggested FIFO as easier to track


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## Fella (2 Sep 2015)

username123 said:


> Good call, contacted Susan and she confirmed you can use FIFO or averaging. She suggested FIFO as easier to track



This doesn't makes sense to me , I was told each purchase of an ETF is a unique purchase so if I buy an ETF say msci world now and buy it again in a year at a differnt price if I use averaging it means It's a possiblity that I am getting loss relief if one of them has decreased below cost price but one has increased.


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## Boyd (2 Sep 2015)

... removed...


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## Gordon Gekko (2 Sep 2015)

Personally I don't think it's appropriate to reproduce the email from her to you on a public forum like this.


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## phanteon (20 Oct 2015)

What is the best way to contact Susan ?
Will Susan give me tax advice if i don't give her my name?
Can I send Susan an email with a query and except a reply if i don't give Susan my name?


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## landlord (20 Oct 2015)

I don't know !!why not email her and find out.


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## phanteon (20 Oct 2015)

Yes you are right landlord.
I was trying to set up another email account but I got bogged down in my efforts.
I may wait and get my son or daughter to do it for me.


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## landlord (20 Oct 2015)

You must really have something to hide !!


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## phanteon (20 Oct 2015)

Not at all.
My accountant advised me not to contact revenue as it might bring attention to me. Maybe he doesn't want attention brought to him.
I am sure he has made mistakes like a lot of accountants do.


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