Deduction for management cost foreign investment

M

Merlin

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Hi there,
I received some dividends for foreign investment products (in Germany) in 2024 and will declare this in my tax return as no WHT was paid etc. Just wondering if I can deduct the management cost I paid for these financial products in 2024?

Also there is an article in today's Irish Times that despite having paid DIRT on Irish interest I still need to declare it? (Going abroad to make your savings work for you)
"If you are Irish with a savings account in Ireland, the tax you owe on any interest earned here – the 33 per cent deposit interest retention tax (Dirt) – is deducted automatically. It’s deducted by the bank before the interest is paid to you. You don’t have to pay any further income tax or universal social charge on the interest, but you must declare the interest as income if you are making an income tax return."

Thank you so much for your help
 
Merlin said:
I received some dividends for foreign investment products (in Germany) in 2024 and will declare this in my tax return as no WHT was paid etc. Just wondering if I can deduct the management cost I paid for these financial products in 2024?
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Aren't such costs potentially allowed to be offset against capital gains and not dividend income?

How to calculate CGT

This page explains how Capital Gains Tax is calculated
www.revenue.ie www.revenue.ie
Merlin said:
Also there is an article in today's Irish Times that despite having paid DIRT on Irish interest I still need to declare it? (Going abroad to make your savings work for you)
Click to expand...

How do you declare Deposit Interest?

How do customers submit Deposit Interest Retention Tax on their tax returns
www.revenue.ie www.revenue.ie
 
Merlin said:
I received some dividends for foreign investment products (in Germany) in 2024 and will declare this in my tax return as no WHT was paid etc. Just wondering if I can deduct the management cost I paid for these financial products in 2024?
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Was the investment product a UCITS fund?

Can you provide more details on the "management cost" you are referring to?
 
These are shares I inherited (in a German bank) so to be honest I don't know a huge amount about them and the dividends are small (less than 5000K)
IIV MIKROFINANZFONDS INHABER-ANTEILE - I received a dividend of 199.98 Euro in 2024 but there is a cost involved in managing this of 88.84 Euro
(This is just one example there are a few more)
 
How is this cost incurred? How do you pay it? Who do you pay it to?

On edit: This page suggest that what you hold (IIV MIKROFINANZFONDS INHABER-ANTEILE) is not shares in a German bank, but units in an investment fund managed by Invest In Vision GmbH, a fund manager offering socially responsible products "that offer a social return in addition to financial returns". There's nothing wrong with that; it's great. But the investment you're holding is a very long way from bank shares, and you may want to think about how it fits into your investment strategy and whether you wish to continue holding it. And of course if you decide to dispose of it then the problem of how to treat these management costs for tax purposes goes away.

If you continue to hold the product, this issue wouldn't normally arise. With funds of this kind the costs and expenses are deducted within the fund before distributions are made to unitholders, so the distribution you get (and include in your tax return) is net of costs and expenses.

It may be that what is happening in your case is that there is some broker or bank in Germany that holds these units for you, and makes an annual charge for doing so. If that's the case then, yeah, this charge is deductible when accounting for income tax on the dividends you receive.
 
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I don't think this is true

Annual broker and account fees can not be offset against dividend income

It also seems like that investment is in a fund which is probably taxable under the Exit Tax regime @ 41% and not as income
 
TomEdison said:
It may be that what is happening in your case is that there is some broker or bank in Germany that holds these units for you, and makes an annual charge for doing so. If that's the case then, yeah, this charge is deductible when accounting for income tax on the dividends you receive.
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Like @jpd, I don't think that this is correct. It may be that the relevant expenses can be offset against eventual capital gains on this investment but I don't think that they can be written off against the dividend income.
 
On reflection I think jpd and Clubman are correct — if this is an account-keeping fee or similar, it's not deductible.

I also think that, however this income is characterised, it's not a dividend. It might be interest income, but more likely it's investment fund income
 
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