Is the 41% Exit Tax Soon to be Scrapped? Michael McGrath to Review
- Thread starter Always Learning
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Probably political. Didn't want to run the rock of being perceived to be giving a freebie to 'rich' investors.
We all know that, but do politicians know that, and do they believe the electorate know that?
And do the politicians believe that those who supply the electorate with their opinions believe that (or even if they know that might tell the electorate that its a fat cats' windfall from the government).
Sounds easier to leave it for a non election year.
Fibbernacci
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Like the SFT they are best slipping it in to next year's finance bill after the budget. Government likes to keep the peace by making a big deal about what the non-working class are getting but saying not much out loud about what the rich are getting.
I doubt it. Unless the banks are in their ear that they'd prefer to stay cannibalizing their own deposit base via shareholder delight expensive investment products via Irish life and New Ireland and not encourage anyone else to think about doing that.
If folk won't move their money to the higher yielding non-Irish deposit accounts in other jurisdictions and prefer to let the Irish Banks collect higher margins on their money here, I'd not expect those same people to invest away from deposits en masse.
The tax is still wagging the investment dog even though we'd expect that the 41% rate will reduce and deemed disposal will be gone in the 8 year cycle of the next two Governments. I don't see an immediate influx to unit-linked funds, even with that knowledge. Maybe folk are just procrastinating and waiting to see it in black and white.
Just watched a YouTube video from a US investor talking about the advantages for us investors to invest in Irish domiciled ETFs rather than US domiciled ETFs. The us investor is charged 30% dividend witholding tax investing in the US domiciled ETF but the exact same ETF domiciled in Ireland he is only charged 15% due to a treaty between Ireland and the US
Is it any wonder there is so much money over 1 trillion dollars invested in Irish domiciled ETFs and again points to Ireland being a tax haven except if you are Irish of course, then they have the most Draconian investment tax regime in the western world. I think this angle needs to be hammered home in order to force government to lift this deemed disposal tax immediately
Is it any wonder there is so much money over 1 trillion dollars invested in Irish domiciled ETFs and again points to Ireland being a tax haven except if you are Irish of course, then they have the most Draconian investment tax regime in the western world. I think this angle needs to be hammered home in order to force government to lift this deemed disposal tax immediately
Looks like all the government talk of discontinuing with deemed disposal and 41% tax started with EU instruction to make investing more accessible.
It’s probably just as well the EU want this, as presumably government are expected to see it through (assuming FG/FF return after the GE). Otherwise it might never happen.
www.rte.ie
It’s probably just as well the EU want this, as presumably government are expected to see it through (assuming FG/FF return after the GE). Otherwise it might never happen.
How can Europe tap into trillions worth of hidden funds?
When EU officials travelled to Washington recently, the US Federal Reserve Chair Jerome Powell showed them a chart showing American productivity over a 40-year period compared to European productivity.
So looks like pascal Donohue has been talking out of both sides of his mouth. At European level he wants a single rules based system for every country to make it easy for companies to access capital from stock markets like in us, on the other side of his mouth he has been defending the unique deemed disposal regime in Ireland which is contrary to everything in that article about European capital markets.Looks like all the government talk of discontinuing with deemed disposal and 41% tax started with EU instruction to make investing more accessible.
It’s probably just as well the EU want this, as presumably government are expected to see it through (assuming FG/FF return after the GE). Otherwise it might never happen.
How can Europe tap into trillions worth of hidden funds?
When EU officials travelled to Washington recently, the US Federal Reserve Chair Jerome Powell showed them a chart showing American productivity over a 40-year period compared to European productivity.
In the light of European moves to make investing in European capital much more streamlined I'm beginning to think that revenue removing their clarification about us domiciled ETFs being taxed differently and more beneficialy than European (irish domiciled) for Irish investors was an embarrassment for the government and that was the real reason this clarification was removed without really changing anything. The 1 trillion invested in Irish domiciled ETFs which consist largely of us companies by us financial funds is the Achilles heel for the government and this needs to be hammered home
Pascal always struck me as someone the civil service would describe as 'a pleasure to work with'.
For what it's worth the program for government for 2025 for taxation says
"Progress and publish an implementation plan for consideration in Budget 2026 taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow this sector in Ireland."
"Progress and publish an implementation plan for consideration in Budget 2026 taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow this sector in Ireland."
The report said something along the lines of Irish people falling behind their European peers, due to the poor participation in investment products, i.e. we're falling behind as our money is sitting in cash in banks, an issue which then compounds over time.
The best way to encourage participation is to offer incentives. They're used all over the tax system from plastic bag levies to sugar taxes to encourage behaviour in a certain direction. No different here, people can be nudged towards providing for their future.
The State has a self-interest in doing this. Look at the demographics. People are living longer, fewer workers for every pensioner, greater numbers of individuals who will be renting in retirement, I can't quite work out what the hesitancy has been so far.
Even in socialist France, you can open a tax sheltered investment account and have up to 150k in it (which goes to 300k per couple/household).
www.interactivebrokers.ie
The best way to encourage participation is to offer incentives. They're used all over the tax system from plastic bag levies to sugar taxes to encourage behaviour in a certain direction. No different here, people can be nudged towards providing for their future.
The State has a self-interest in doing this. Look at the demographics. People are living longer, fewer workers for every pensioner, greater numbers of individuals who will be renting in retirement, I can't quite work out what the hesitancy has been so far.
Even in socialist France, you can open a tax sheltered investment account and have up to 150k in it (which goes to 300k per couple/household).
Plan d’Epargne en Actions (PEA) Accounts | Interactive Brokers Ireland
French tax-resident clients use a PEA account to acquire a portfolio of European securities while benefitting from preferential tax conditions.
www.interactivebrokers.ie
No
Yes
Don't wait for someome else to do 'something', keep the pressure on your TD.
If I was thinking about investing, in the hope that Life Assurance Exit Tax was going to be reduced, I'd do that.
If I was thinking about doing a full encashment @ 41% now , but didn't really need to, I'd probably hold off on that (just on the potential lower tax angle though).
If I had paid 41% on a chargable event and plan was still in force but was thinking about getting out, I'd probably let that run (again, just on the taxation).
Will it go from 41% to 33% in one move? Seriously doubt that.
When I submitted a few scenarios to Revenue and asked them provide details on how a change in LAET would affect those examples, I was told that, Revenue has not established the operational impacts of a decision to reduce the rate of LAET as that decision has not been taken - which I took as a 'Stop bothering us we aren't really concerned about your need to provide accurate comment/advice. And, we never really envisaged, or had a plan in place, for when LAET would be reduced'
(I'm only talking about LAET here. as that's my area).
Gerard
www.bond.ie
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He will mostly likely be Minister for Finance again in 2027 when the position of Taoiseach rotates.
I'd be friggin amazed if Donohue did nothing, seeing as he set the ball rolling in the first place.
It was McGrath who announced it, you may have more insight though on what happened ahead of that?
Budget 2023 was 27th September 2022.