Duke of Marmalade
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I think the exit tax rate will be cut. Stroke of a pen.
Is the 41% Exit Tax Soon to be Scrapped? Michael McGrath to Review
- Thread starter Always Learning
- Start date
The life assurance companies dictate savings/investment taxation policy to Government/Revenue so clearly it's in their interest to pile as much misery as possible on those who want to buy ETFs outside of a wrapper product. Rumour has it that they're pushing for a 2% Levy on investment amounts and reducing the 8 years to 5 years, just for ETFs. They're trying to distort the market in such a way as to drive those serpent EFT platforms from our shores.
( Out of necessity
)
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Duke of Marmalade
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This is a mirage. Somebody pays the 1% levy - guess who?
In the context of this thread, the product provider.
You should probably mark this as sarcasm
They would really be sticking up the 2 fingers to minister mcgrath (former) and the whole public submission on review of the funds sector if they were to totally ignore those public submissions and actually push more to the extreme. If thats the case then the life assurance companies are a bit like Putin's oligarchs pulling the levers in the backround and to hell with the minister and public submissions.
Duke of Marmalade
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This is a charge which other UCITs don't pay. The 1% extra allocation has to be seen in the context of the other charges, notably the AMC. If a life company has the same AMC as a UCITs but an extra 1% allocation then sure, compared to the UCITs, it is has borne the charge and is working on a lower profit margin. But regarding the 1% extra allocation in isolation is meaningless. One might as well argue that companies bear the initial commission if there is not a reduced allocation.
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The industry has been lobbying against the levy and for a reduction in exit tax to match DIRT. The previous post is clearly sarcasm.
judging by some of the "clarifications" they brought in regarding ETFs over last 5 years it actually looked plausible
Indeed.
It was an attempt to bring a bit of balance to the conspiracy theorist who, since Feb (?) of this year, have convinced themselves that something else more sinister is afoot, even though deemed disposal is around since 2006.
If you don't like something and you're not getting your way, you sit on your backside and look for someone else to blame, rather than being proactive and addressing the issue with those that have the power to change it.
@Duke of Marmalade Are you not confusing this with being a provider charge rather than a Government charge?
Providers can choose to cover the cost of it, or not.
It's in a KID as an entry charge equivalent to 0.15% pa. If you can get a provider to cover the cost of it then that reduces that charge to 0.00. The provider still has to hand the 1% to Government.
If you don't get 101% your net allocation is 99% ie. punter pays. If you do get 101%, your net allocation is 100% ie provider has paid it for you.
If you look at some of the disclosure schedules with 101% allocation you'll see that the Total Expenses & Charges in year 1 are often negative figures. Which does cause a bit of confusion for customers who actually read them.
Providers can choose to cover the cost of it, or not.
It's in a KID as an entry charge equivalent to 0.15% pa. If you can get a provider to cover the cost of it then that reduces that charge to 0.00. The provider still has to hand the 1% to Government.
If you don't get 101% your net allocation is 99% ie. punter pays. If you do get 101%, your net allocation is 100% ie provider has paid it for you.
If you look at some of the disclosure schedules with 101% allocation you'll see that the Total Expenses & Charges in year 1 are often negative figures. Which does cause a bit of confusion for customers who actually read them.
There still is a chance that they'll announce something on the rate, in the Budget. The question mark, for me, is whether the recent changeover in Minister might have affected that.
As for complete overhaul of the tax regime on Deemed Disposal, I really don't know.
Unless you’ve seen something I have not, there has been no recent indication that changes will be made favourable to investing in ETFs?
In May McGrath said “I’d like to see a significant share of those funds [€150bn in bank accounts] being put to more productive use in the economy, investing in structures that help to fund and support early-stage and innovative businesses,”.
That reads like enhancements to EIIS to me and seems to deliberately exclude encouraging us to send our deposit savings out of the economy to support MNCs in global ETFs.
thats what internet forums are for, discussion. Ireland is an outlier regarding this taxation so its not unreasonable to speculate on whats really behind it. Sure you yourself have been the main proponent of the fact that it is the life assurance companies that are really throwing sand into the gears regarding deemed disposal and ETFs. Also you seem to have inside knowledge of the industry, and your contributions have been very enlightening and welcome.
When there is so much secrecy behind decision making process in government and when Revenue rules regarding taxation of ETFs are so opaque and unintelligable and when trying to get information is like bouncing a ball off of mud, is it any wonder that speculation and conspiracy is ripe
I'd really like to see the link to the post where I said that (that wasn't an obvious bit of sarcasm based on the context of the full thread or what had been posted just prior).
I don't have an inside knowledge, no more than any other intermediary might have. I might look at things a bit differently and base opinions on that but no crystal ball here.
Ah yes, from deposit accounts to start ups. The logical next move, and nothing could possibly go wrong
Duke of Marmalade
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Life company A has 101% allocation, .75% AMC
Life company B has 100% allocation, .6% AMC
Same deal to the punter and yet A markets itself as paying the levy.
Same with the betting levy. No bookies explicitly make punters pay the betting levy, but, for sure, it is the punters who are paying.
The bottom line is that the 1% levy is a deduction ultimately borne by the punter.