Is the 41% Exit Tax Soon to be Scrapped? Michael McGrath to Review

GSheehy said:
Maybe I'm reading this wrong but how can the Annual Cost Impact (If you exit in year 1) be to 2.76% with the specify charging structure we're talking about?
Click to expand...
They give a range of costs despite the specified charging structure. The variation arises in the 3rd and 4th categories below.
1727617315438.png

GSheehy said:
I don't know any actuary/manager who puts any credibility at all in KIDs. If you wanted to try and do a competitor comparison you'd not be looking at KIDs. They are really misleading.
Click to expand...
I'm not particularly fond of KIDs myself but it was you who introduced them into this debate. ;)
 
Duke of Marmalade said:
I'm not particularly fond of KIDs myself but it was you who introduced them into this debate
Click to expand...
In the context of the Levy, yes. It's not too difficult to work out that the 'entry charge' relates to the Levy only.

The rest, is a mess.

Duke of Marmalade said:
They give a range of costs despite the specified charging structure. The variation arises in the 3rd and 4th categories below.
Click to expand...

In the context of Ongoing Costs each year but we're taking about year one.

Plus, you do see the 0.00% and 1.59% on those rows? What you should probably be doing is deducting the 0.75% from the 1.59% (AMC) giving you a to 0.84%, which would allow for other fund transaction costs too. Indexed Global Equity would bring the 0.75% to circa 0.77%.

I think we've been down this road before though with the fixation of a lot of folk on the figures on the right because they think you have to be buying the worst product available.
 
Last edited:
Gordon Gekko said:
Don’t let the tax tail wag the investment dog, etc.
Click to expand...
but that is exactly what the government has done with this stupid "deemed disposal" they have frightened people away from ETFs probably the best investments for retail investors ever. I know ETFs were still small back in 2008 but think how much better it would have been for small irish investors to have a diversified ETF investment than being wiped out by investments in irish banks and bulgarian properties. Yet the irish tax code still has not changed since then except for increasing all investment taxes.
Also your point that "deemed disposal" is necessary since some of these "gross roll up" funds could avoid any taxes since they roll up the dividend, but they are still taxing dividend paying ETFs every year aswell as 8 year "deemed disposal". So surely a better solution would be to remove all ETFs that pay dividends from "deemed disposal" tax and end "gross roll up" altogether and collect a "deemed dividend" tax from those funds that do not pay out dividends every year. Of course it could only be at most 3% since if they tried to match it to the now 41% tax take at year 8 it would expose it for the tax grab that it really is.
 
Last edited:
basilbrush said:
Am I correct that there was no mention of deemed disposal or exit tax in the budget?
Click to expand...

Statement by Minister Chambers on Budget 2025

www.gov.ie www.gov.ie

Review of funds sector​

Ireland has a leading position in the investment funds and asset management industry globally. The sector is a significant employer, supporting almost 20,000 jobs, with close to half of these located outside of Dublin.
Last year my department established a Funds Review Team and began a detailed forward-looking review of the Funds sector with a view to safeguarding Ireland’s leading position in the investment funds and asset management industry.
I recently received their report, which I intend to bring to Government shortly and to publish thereafter. Following consideration of the findings, I will then outline the next steps.
Click to expand...
 
At least they haven't just ignored it and are actually going to move on this. Also the fact that they highlighted how important the funds sector is to irish economy.
Still the fact that most of the submissions came from retail investors frustrated at the taxation of etfs in Ireland means they have to address this somewhat, they can't ignore it or use gobbledegook jargon
 
He mentioned the funds industry in the budget speech.
I think he is referring to the importance of the funds industry in Ireland, in relation to funds listing, servicing, jobs.
And not relating to Irish retail investors in such funds.
 
Very true

The fund providers/management companies headquartered here don't give a fig for the Exit tax for Irish retail customers. They are here for tax and infrastructure reasons.

The vast majority of their customers reside outside Ireland

Even if everyone in Ireland bought their products, the vast majority of the customers would still reside outside Ireland
 
jpd said:
Very true

The fund providers/management companies headquartered here don't give a fig for the Exit tax for Irish retail customers. They are here for tax and infrastructure reasons.

The vast majority of their customers reside outside Ireland

Even if everyone in Ireland bought their products, the vast majority of the customers would still reside outside Ireland
Click to expand...
Yes but it actually draws more attention to the fact that ireland is a tax haven for big multinationals. By differentiating so much between the taxation of big international fund houses and small irish investors it draws more attention to the perverse nature of it. The central bank actually made this point in their submission, someone posted it earlier on in the thread. It's a bit like having fancy resorts in North Africa but only for Europeans and westerners but the locals are not allowed in
 
Nobody in power in Ireland cares about Exit tax - most of the electorate are not concerned by it

The only people with any power who care about it are the Life Assurance companies - and they do want want it changed or scrapped
 
"
Thanks for the update.

It would be interesting to have an example of US domiciled ETFs that the Revenue believe that the confirmation does not apply to.

As has been mentioned after this post, it is a complex area and the Revenue seem to be struggling with the taxation of ETFs and funds outside that of the life company wrapper. It doesn't help that they haven't amended the tax forms to make it clear to investors where to put their returns or to include it on a Form 12. As investing on platforms has become so mainstream, amending tax return forms is the easiest thing to do for the administration of declaring returns.

All can be done while we await the results of the review on the taxation of ETFs and funds in Ireland."

This is a good post from another thread about the taxation of us domiciled etfs . @Steven Barrett was replying to another poster who revealed that revenue were happy that all his portfolio of etfs that were us domiciled were correctly categorised as cgt shares under normal cgt taxation not deemed disposal during an audit. It was the first hard example of how revenue are actually dealing with us domiciled etfs
 
Last edited:
Pre-2022 for that portfolio yes. It's not clear from that post that all US ETFs are still categorically taxed under CGT now.
 
Corola said:
Pre-2022 for that portfolio yes. It's not clear from that post that all US ETFs are still categorically taxed under CGT now.
Click to expand...
That post was saying that his clients portfolios were deemed to be taxed under CGT. The Revenue e brief says that the blanket assumption that they are taxed under CGT no longer applies and each ETF is to be assessed on its own merits. Given the tens of thousands of ETFs, the Revenue will not publish a list of which are taxed under CGT and which are not...and this is not their job either.
 
But the period of the audit was 2019-2022. Before 2022 it was the case that US ETFs were taxed under CGT. It's not clear from the post what disposals there were in 2022 that would fall under the new ambiguous guidance.
 
Last edited:
You must log in or register to reply here.
Back
Top