I'd also be happy to make a submission if we could come up with a concise well reasoned piece of text. A separate thread might be best?The perception is that these products are for wealthy people only.
If someone sends me a private message, with a few bullet points, I will make a submission.
Whats the most effective sort of argument to make?
If someone sends me a private message, with a few bullet points, I will make a submission.
Feel Free to lift anything that I have written in this thread.I'd also be happy to make a submission if we could come up with a concise well reasoned piece of text.
Disagree. We have an incredibly complicated Exit Tax system (even Revenue themselves can't issue clear guidance on what does and doesn't qualify). It's manifestly unfair both in the way it taxes you on paper gains instead of real gains and ignores losses. It's administratively a complete nightmare (trying to keep track of the 8 year rule for multiple buys). It discourages the majority of people from investing in the product (ETFs) best suited to them. And it takes in hardly any extra tax. Your argument is lets make it ever so slightly less sh*t. It needs to be scraped or at least only applied to clearly defined, select Life products.
Maybe if more light was shed on this in the international media to embarrass the Irish government to make changes. Maybe a headline in the financial TimesAssets in Ireland-domiciled ETFs top €1tn for first time
The total accounts for 68% of the nearly €1.5tn European market
According to article in FT
Assets in Ireland-domiciled ETFs top €1tn for first time
The total accounts for 68% of the nearly €1.5tn European marketwww.ft.com
I find it disgusting that the Irish government gives the rest of the world a tax free ride on ETFs but hammers it's own citizens with 41% Exit Tax!
There is absolutely no issue with this. How Irish ETFs are taxed in Italy, say, is entirely a matter for the Italian authorities; how they are taxed in Ireland is a matter for the Irish authorities. It appears that Irish ETFs have a tax advantage through our DTA with the US in that I presume they can reclaim withholding tax. Doesn't seem enough to justify such dominance. ETFs, as with many investment products, are essentially an Anglo Saxon preserve and I presume our industry is the access of choice for these US/UK international giants to the EU market.Irish domiciled ETFs a low tax haven for Europeans except if you live in Ireland.
I doubt english speaking is much of a concern for ETFs or investment products generally, it not like they are a big pharma company or something producing a complex product where accurate communication among a large number.of people is important.ETFs, as with many investment products, are essentially an Anglo Saxon preserve and I presume our industry is the access of choice for these US/UK international giants to the EU market.
For sure, my instinct tells me this dominance has either a strong tax motivation and/or regulatory arbitrage. The DTA with the US is a wholesome advantage. But I find it hard to see the "Double Irish" or similar devices to those that allowed Apple to transfer price being available to the ETF industry. Yes, there is the 12.5% CT rate. Can you cite any other big tax advantage?They are essentially brass plate operations in the IFSC and here primarily because of the tax advantages afforded to them by the Irish authorities
Of course it is. @AJAM made this point before and I pointed out its irrelevance. The time value of money in the example is 7% p.a. or put another way if the Revenue were to invest its deemed disposal tax (collected at years 8 and 16) in said ETF it would earn 7% p.a. and that would eliminate the apparent anomaly.Question: I presume this is simply due to the timing, as in the 41% exit tax at year 8 causes a big interruption to the effects of compounding?
I'd have no problem paying tax on income within the fund in any given year. I lived in Australia and I assume it's similar to the UK but the fund has to declare income for the year and you can either take it as cash or reinvest it but you pay income tax either way. You get a personal report at the end of the tax year from the fund manager and you enter that amount in your tax return. Takes all of 5 mins.Of course it is. @AJAM made this point before and I pointed out its irrelevance. The time value of money in the example is 7% p.a. or put another way if the Revenue were to invest its its deemed disposal tax (collected at years 8 and 16) in said ETF it would earn 7% p.a. and that would eliminate the apparent anomaly.
Let's get real. There must be deemed disposal or something similar for accumulator ETFs. In the UK it is annual look through to the dividends which are then subject to the usual progressive taxation - in Ireland's case that would at a max be 52%. Pretty messy. An alternative is deemed disposal after a period of years. The Exit Tax could be progressive but for historic reasons it is an aggregate. The question is whether 41% is a fair aggregate between CGT of 33% (and of course the annual exemption) and dividend taxation ranging from 0% to 52%. Exit Tax rate began life over 20 years ago at 23% being 3% higher than the DIRT rate, itself an aggregate rate. 41% must be seen as some sort of emergency tax arising from the GFC and I would argue that a return to DIRT +3% is justifiable.
Submissions should be realistic. Making accumulator ETFs subject to CGT and only on realisation is a total non runner. Considering that death is CGT exempt, accumulator ETFs would simply be a vehicle for wealthy individuals to accumulate the estate for their beneficiaries totally tax free (albeit the beneficiaries would be subject to CAT).
Yes, it is a totally viable method. But it would lend itself to progressive taxation. I think the industry would prefer an aggregate exit tax rate, provided it was a genuine compromise across the income bands - 41% is too high.I'd have no problem paying tax on income within the fund in any given year. I lived in Australia and I assume it's similar to the UK but the fund has to declare income for the year and you can either take it as cash or reinvest it but you pay income tax either way. You get a personal report at the end of the tax year from the fund manager and you enter that amount in your tax return. Takes all of 5 mins.
Of course it is. @AJAM made this point before and I pointed out its irrelevance. The time value of money in the example is 7% p.a. or put another way if the Revenue were to invest its deemed disposal tax (collected at years 8 and 16) in said ETF it would earn 7% p.a. and that would eliminate the apparent anomaly.
Let's get real. There must be deemed disposal or something similar for accumulator ETFs. In the UK it is annual look through to the dividends which are then subject to the usual progressive taxation - in Ireland's case that would at a max be 52%. Pretty messy. An alternative is deemed disposal after a period of years. The Exit Tax could be progressive but for historic reasons it is an aggregate. The question is whether 41% is a fair aggregate between CGT of 33% (and of course the annual exemption) and dividend taxation ranging from 0% to 52%. Exit Tax rate began life over 20 years ago at 23% being 3% higher than the DIRT rate, itself an aggregate rate. 41% must be seen as some sort of emergency tax arising from the GFC and I would argue that a return to DIRT +3% is justifiable.
Submissions should be realistic. Making accumulator ETFs subject to CGT and only on realisation is a total non runner. Considering that death is CGT exempt, accumulator ETFs would simply be a vehicle for wealthy individuals to accumulate the estate for their beneficiaries totally tax free (albeit the beneficiaries would be subject to CAT).
And what rules are they?There's nothing unrealistic about going back to the same rules that existed less than twenty years ago, and still exist in most other countries. We are the outlier.
accumulator ETFs would simply be a vehicle for wealthy individuals to accumulate the estate for their beneficiaries totally tax free (albeit the beneficiaries would be subject to CAT).
And that is logical , fair and simple you pay tax on the income whether it is payed out or rolled up. That's what most of the rest of developed world does. But the Irish authorities are not content just to take income taxes they also want to take unrealised capital gains aswell. However they would never dream of doing that with other assets like property which is the asset dejour of the Irish establishmentI'd have no problem paying tax on income within the fund in any given year. I lived in Australia and I assume it's similar to the UK but the fund has to declare income for the year and you can either take it as cash or reinvest it but you pay income tax either way. You get a personal report at the end of the tax year from the fund manager and you enter that amount in your tax return. Takes all of 5 mins.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?