Irish Life Funds vs ETF investing

I had a quick question regarding the CGT annual exemption of €1,270. As I understand it, this can be used against gains made on share disposals. However, this doesn't apply to ETFs as they are not taxable under CGT?
 
Hi Joey,

One other tax experts on here can confirm but that is what I understand also - another downside to holding ETFs personally is that there is no annual CGT allowance.

Instead disposals fall under the 'exit tax' treatment which is different to CGT.

Hope that helps, this has been a useful thread.
 
I have given much thought to my options over the last few months and finally reached a conclusion that shares might indeed be the best option for someone that wants to make better use of a lump sum of cash and have occasional top ups to their investment.

Berkshire Hathaway has been mentioned on here in a few of the older threads and it seems like a relatively low risk option that will equal or beat the S&P500. Really that's all most people are looking for. I won't go into anymore discussion on it as this is not the place for it.

I will have losses forward that can be used against the gains made on this (losses made on a silly gamble I took years ago before properly reading up on the stock market and how easily you can be stung)


To summarise:
  • Passive funds are simply too expensive (stamp duty & fund manager commission) and are too restrictive in terms of penalties for leaving the scheme early.
  • ETFs are a decent choice but the exit taxes are higher than shares. If I were to go down this route I'd keep it as simple as possible with 1 maybe 2 accumulating ETFs, one of which tracks the MSCI World Index.
  • Non dividend paying shares are in many peoples opinions the best choice due to their lower level of taxes (CGT rate vs Exit tax rate on ETFs), the opportunity to use losses on shares within your portfolio against gains on others and the annual exemption that can be used against gains.
Of course the points above are dependent on what the government does in the future regarding tax rates etc. Exit tax rates may become lower than CGT... or ETFs may be possibly taxed under CGT if their popularity continues to increase
 
Look out for an ETF feature in this week's Sunday Business Post
 
I read the article today, wouldn't bother picking it up to be honest. Seemingly there is some clarification on taxation being written by the Revenue currently but other than that it doesn't feature any new information.
 
You must log in or register to reply here.
Menu
Log in
Register