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

GSheehy said:
They had 337 submissions and I'd say the vast majority of those were from individuals who buy ETFs

Paschal announced the review in the last budget.
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sorry it was an assumption by you that the vast majority were from individual investors not a hard fact. You also said that you would be very surprised if the life companies made any submissions in the same thread
 
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joe sod said:
sorry it was an assumption by you that the vast majority were from individual investors not a hard fact. You also said that you would be very surprised if the life companies made any submissions in the same thread
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I would've expected them to have Insurance Ireland make a submission on their behalf
 
It doesn’t read as though they’re going to make sending money into large corporates in the US economy through the likes of S&P500 ETFs easier. Maybe more improvements to EIIS?

“I’d like to see a significant share of those funds being put to more productive use in the economy, investing in structures that help to fund and support early stage and innovative businesses,” he said.
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In fairness Michael mcgrath has been alot more proactive on this issue than his own department and what pascal Donohoe was. Pascal incorrectly answered a question on deemed disposal in the Dail.
 
I think there is a lot of wishful thinking going on in this thread.
I'd personally love to see the 41% rate reduced, but I’m not sure politically it would be either popular or a vote winner for the political parties that will need votes come the next general election.

g
 
Zenith63 said:
It doesn’t read as though they’re going to make sending money into large corporates in the US economy through the likes of S&P500 ETFs easier. Maybe more improvements to EIIS?
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That’s how it reads to me.

Although, I don’t know what further tax enhancements could be made to EIIS.
 
“I’d like to see a significant share of those funds being put to more productive use in the economy, investing in structures that help to fund and support early-stage and innovative businesses,”

that’s not a helpful comment from investor perspective. I have no interest in helping early-stage investor. Nor I suggest should most investors. Does he want to help investors or small businesses?
 
Zenith63 said:
It doesn’t read as though they’re going to make sending money into large corporates in the US economy through the likes of S&P500 ETFs easier. Maybe more improvements to EIIS?
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Sound like promoting investments that should only be undertaken by people who already have a diversified portfolio who could take on a little proportion of overly concentrated investment
 
Zenith63 said:
It doesn’t read as though they’re going to make sending money into large corporates in the US economy through the likes of S&P500 ETFs easier. Maybe more improvements to EIIS?
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If improving the EIIS is his plan, they has seriously misread the room. People don't want to invest in small companies in Ireland. They want lower taxes on ETFs!! Don't think that deemed disposal is going away though. Unless they have two different tax regimes for distributing and accumulating funds, it will stay.

That's an outdated view. Investing is no longer just for the wealthy, who needed a stockbroker to place trades for them. With online broker accounts, it is available to everyone, and everyone is taxed the same. And FF aren't going to get the socialist vote anyway. They are better off in keeping the more centrist voter happy and making changes to the tax regime on investments will do that. Just look at all the complaints on this site about the tax on investments. Surely the party that reduced the tax would be worthy of a vote at the ballot box?
 
Politicians love to talk up the hard-pressed SME sector.

Political rhetoric and the practical effects could diverge.

It could be hard to design tax changes that only benefit investment in Irish start-ups and not the 99.999% of other assets in the world.
 
So much policy in Ireland is influenced by NGOs and industry lobby groups, much of it even written by them. It’s been a massive growth area in the last ten years at the expense of an autonomous, well-paid civil service.


Savers and investors just need to form their own lobby group. Getting face time with politicians in Ireland is remarkably easy.
 
Dr Strangelove said:
Politicians love to talk up the hard-pressed SME sector.
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As somebody who has raised money for SMEs in Ireland I can attest to the fact that it's a pretty poor situation. The EIIS scheme is extremely complex and restrictive to the point that most SMEs cannot afford to run it themselves, which leads them to relying on the various EIIS funds who add layers of governance, fees and more restrictions that turn EIIS into more of a risk-averse debt structure than venture funding. Outside of EIIS there is very little native venture funding available, other than a handful of family offices or looking to UK funders. There is huge scope to improve this situation which would shift the focus away from MNCs and generate jobs and wealth.

Dr Strangelove said:
It could be hard to design tax changes that only benefit investment in Irish start-ups and not the 99.999% of other assets in the world.
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It's not hard at all, the EIIS scheme and the likes of Entrepreneur Relief already very effectively target these businesses, they just need more attention.

Having said that I think it's nuts to suggest ordinary punters should be investing in EIIS companies. You'd have people only able to afford one investment, getting burned then ending up on Joe Duffy, then the narrative and sophistication of retail investors would become even worse than it already is. For ordinary punters the answer is resoundingly ETFs and this needs to be made easier and more obvious.
 
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I presented a motion at the recent Fine Gael Ard Fheis about bringing ETF's into standard tax rules to incentivise investment. Unlikely to go anywhere but got good feedback.
I agree the EIIS scheme can be complex and likely stops some looking to use it.

I think rather then trying to reinvent the wheel we need to look else where to see what has worked. Could we do something like the UK only ISA that come in last budget to encourage local investing or each person gets a dividend free threshold to encourage investment
 
Dr Strangelove said:
We can easily overthink this.

A 25% CGT rate and a return to indexation relief would get more investment in all types of assets.
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A lower CGT rate is good for the large investor, but it is better to build the middle class, so I would prefer an increase in the €1,270 exemption amount so smaller scale investors could have 100% tax free gains.
 
I agree the political climate has definitely changed after the drubbing the government got in the referendums, they now need to be seen to support the productive sector in the economy, the people that get up every day to goto work. Interesting that it is FF that are doing the running on all this and not FG, varadker talked alot about middle ireland but his policies were all socialist and he alienated their voter base. Pascal Donohoe didn't even understand deemed disposal himself when asked about it in the Dail but he looks to be bowing out now aswell
 
Homepayer said:
class, so I would prefer an increase in the €1,270 exemption amount so smaller scale investors could have 100% tax free gains.
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Taxes with a broad base and a low rate are best:
-socially sustainable
-reduce economic distortions
-maximise yield

The purpose of the €1,270 exemption is more to reduce the compliance burden on the little guy and so that Revenue aren’t dealing with a huge volume of small transactions. I would keep it that way.
 
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