Deemed disposal

As far as I am aware, it does not apply as they are net roll up investments where tax is deducted from the fund along the way. The purpose of deemed disposal is for the Revenue to get their hands on the tax take from savings that Irish savers were keeping for decades without the Revenue getting any of it. If they are getting the tax take from the net roll up policy, there is no need for a deemed disposal.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
If it was an EU fund, then it is unlikely that tax is being deducted and passed on to the Irish Revenue.
 
jpd said:
If it was an EU fund, then it is unlikely that tax is being deducted and passed on to the Irish Revenue.
Click to expand...
Correct my question is in relation to what deemed disposal dates to use ( if atall) for non Irish but Eu regulated fund if the fund was bought before 1/1/2001. I amended wording below to make it clearer.
 
Last edited:
What happens If you have an lump sum invested in an eu regulated ( non Irish regulated ) fund bought before 1/1/2001 when the gross roll up started in Ireland ?

Deemed disposal rules were introduced 2006 I believe ....

eg so if purchase date was 1/1/97

For deemed disposal Is it ;
A) 1997 plus 16 years (rule not applicable back in 1/1 2005) so 1/1/ 2013
Or
B) should it be 1/1/2001 (date all this gross roll up regime started in Ireland ) plus 8 years so 1/1/2009 and then next 1/1/2017.
Or
C) not applicable atall as bought before 1/1/2001


Anyone know ? thanks
Thanks
 
Last edited:
If a UCITS ETF was purchased eg in 2014, and then the investor left Ireland and ceased to be resident or ordinarily resident, and then returned eg in 2025, would the clock 'freeze' and then restart for deemed disposal? Eg 2014 -> date of cessation of tax residence and then start again from zero or start again from however many years the person had been resident?
 
No, the Irish tax system would “forget” the individual and the investment after three years of non-residence.

However, on the return of the individual, the Irish tax system would “remember” both.

The individual should therefore sell the investment prior to returning and reacquire if, mindful of the tax consequences in the other jurisdiction.

Say the timeline was thus:

- Buy UCITS ETF 2014
- Move to Geneva 2017
- Move back to Ireland 2025

A disposal in 2026 would lead to the full gain being taxable in Ireland in 2026. A full “8 year rule” deemed disposal would arise in 2030. The individual should therefore rebase the investment by selling and reacquiring in late 2024.
 
Gordon Gekko said:
No, the Irish tax system would “forget” the individual and the investment after three years of non-residence.

However, on the return of the individual, the Irish tax system would “remember” both.

The individual should therefore sell the investment prior to returning and reacquire if, mindful of the tax consequences in the other jurisdiction.

Say the timeline was thus:

- Buy UCITS ETF 2014
- Move to Geneva 2017
- Move back to Ireland 2025

A disposal in 2026 would lead to the full gain being taxable in Ireland in 2026. A full “8 year rule” deemed disposal would arise in 2030. The individual should therefore rebase the investment by selling and reacquiring in late 2024.
Click to expand...

That's what I thought but wasn't sure! Thanks for the clarification

Edit: would it differ with shares purchased while 'ordinarily resident' in ireland, but primarily tax resident in another country? Eg would they have to be disposed of also prior to returning for optimal gains (depending on rules in other tax jurisdiction etc)
 
mtk said:
What happens If you have an lump sum invested in an eu regulated ( non Irish regulated ) fund bought before 1/1/2001 when the gross roll up started in Ireland ?

Deemed disposal rules were introduced 2006 I believe ....

eg so if purchase date was 1/1/97

For deemed disposal Is it ;
A) 1997 plus 16 years (rule not applicable back in 1/1 2005) so 1/1/ 2013
Or
B) should it be 1/1/2001 (date all this gross roll up regime started in Ireland ) plus 8 years so 1/1/2009 and then next 1/1/2017.
Or
C) not applicable atall as bought before 1/1/2001


Anyone know ? thanks
Thanks
Click to expand...
Anyone able to help here. ?thanks a million
 
Gordon Gekko said:
No, the Irish tax system would “forget” the individual and the investment after three years of non-residence.
Click to expand...


So if an individual invested in equity not subject to deemed disposal that does not pay dividends (such as a USA domiciled accumulating ETF or directly in Berkshire Hathaway stock), they could

- Let the value accumulate over 30+ years in Ireland
- Move to Geneva for 3 years
- Sell it all paying no CGT while not an oridinary Irish tax resident
- Move back to Ireland

From my understanding this individual would end up paying no tax on any gains on the investment?
 
alwaysonit said:
So if an individual invested in equity not subject to deemed disposal that does not pay dividends (such as a USA domiciled accumulating ETF or directly in Berkshire Hathaway stock), they could

- Let the value accumulate over 30+ years in Ireland
- Move to Geneva for 3 years
- Sell it all paying no CGT while not an oridinary Irish tax resident
- Move back to Ireland

From my understanding this individual would end up paying no tax on any gains on the investment?
Click to expand...

Yes. I’d need to double-check the ‘anti Denis O’Brien legislation (29A?) but broadly, yes.

I assume that the Geneva canton is similar to others such as Zug, i.e. no CGT.
 
Last edited:
alwaysonit said:
So if an individual invested in equity not subject to deemed disposal that does not pay dividends (such as a USA domiciled accumulating ETF or directly in Berkshire Hathaway stock), they could

- Let the value accumulate over 30+ years in Ireland
- Move to Geneva for 3 years
- Sell it all paying no CGT while not an oridinary Irish tax resident
- Move back to Ireland

From my understanding this individual would end up paying no tax on any gains on the investment?
Click to expand...

You would need to move to Geneva for 4 years as you would be 'ordinarily resident' in Ireland for 3 years after becoming non tax resident
 
Gordon Gekko said:
Yes. I’d need to double-check the ‘anti Denis O’Brien legislation (29A?) but broadly, yes.
Click to expand...

I assume this link is what you refer to?

It refers to "shares in a company" that
  • is equal to, or greater than, 5% of the value of the issued share capital of the company, or
  • exceeds €500,000.
If an individual sells shares in 20 differrent companies, all less than 5% of the issued share capital and all valued at say €400,000 - do they avoid this legislation despite the total value of sales being far larger than a total of €500,000?
 
I've built a spreadsheet which compares the expected net of tax return for a pension, a "fund or portfolio" subject to CGT and a UCITs or Unit Linked Life Policy subject to exit tax.

I've published some of my findings in two case studies in the following guide which I have made available free on my website here

Personal Savings Accounts - Everlake

This guide sets out how a Personal Retirement Savings account (PRSA) combined with an Approved Retirement Fund (ARF) can be used by any Irish Investor between the ages of 18 and 75 to invest personal savings in a tax efficient way
globalwealth.ie globalwealth.ie

To aid readability click on the infopage link and open the document in the dedicated reader
 
alwaysonit said:
I assume this link is what you refer to?

It refers to "shares in a company" that
  • is equal to, or greater than, 5% of the value of the issued share capital of the company, or
  • exceeds €500,000.
If an individual sells shares in 20 differrent companies, all less than 5% of the issued share capital and all valued at say €400,000 - do they avoid this legislation despite the total value of sales being far larger than a total of €500,000?
Click to expand...

Yes. That doesn’t apply where someone has any number of investments each worth less than €500k. It essentially doesn’t apply at all unless it’s your own company.
 
Was interested in this myself and did not see any obvious figures in thread so did some quick calulations using the original 100,000, 10% return, and a tax rate of 40% and got the following:

8 years - 214,358 without DD, 168,615 with DD (78%)
16 years - 459,497 without DD, 284,310 with DD (62%)
24 years - 984,973 without DD, 479,390 with DD (49%)

Loss of compounding is a killer, with the DD equivalent return dropping to around 6.7%. The ETF is going to take a 33% hit on whatever you withdraw, but chances are you will not be withdrawing it all in a single lump sum.

Looking at that, I am wondering if anyone has had any success with US domiciled ETFs since 2018?
 
mtk said:
What happens If you have an lump sum invested in an eu regulated ( non Irish regulated ) fund bought before 1/1/2001 when the gross roll up started in Ireland ?

Deemed disposal rules were introduced 2006 I believe ....

eg so if purchase date was 1/1/97

For deemed disposal Is it ;
A) 1997 plus 16 years (rule not applicable back in 1/1 2005) so 1/1/ 2013
Or
B) should it be 1/1/2001 (date all this gross roll up regime started in Ireland ) plus 8 years so 1/1/2009 and then next 1/1/2017.
Or
C) not applicable atall as bought before 1/1/2001


Anyone know ? thanks
Thanks
Click to expand...
Did anyone answer mtk's question from 5th Dec 2017. I have read that deemed disposal rules only apply to funds acquired on/after 1 Jan 2001 ?
 
You must log in or register to reply here.
Back
Top