Life Assurance Exit Tax & Deemed Disposal on ETFs

Revenue receipts by taxhead have been updated for 2023 and LAET is down slightly.

There is no figure for Deemed Disposal on EFTs (it's not included in the LAET figure) so it appears that Revenue have no clue whatsover as to how much is being genetated on that taxation front, as it's not adminstered by the product providers.

You'd assume that it's pretty substantial at this stage, no?

It must be lumped in with Self-Assessed Income Tax?

I don't think it's possible to draw many conclusions from the LAET data. It depends on customers behaviour around withdrawals, and on the performance of the funds (the choice of which also depends on customer behaviour).

Thanks for the info Gerard.
I think even more instructive is the difference in growth between LAET and CGT
Since 2015 LAET has has dropped by 6% (247 to 231 million).
Over the same time period CGT has increased by 120% (692 to 1,520 million).

The 41% Exit tax is costing everyone money.

Yes, it appears that it's beyond Government thinking that a reduction in the rate might generate a higher return for them.

But, as they've nothing to 'compare' it to in terms of the tax take on ETFs, they may not see a connection. It's quite bizarre that an extremely efficient Revenue have no idea whatsoever how much tax is being collected via this vehicle whilst the Government are reviewing Deemed Disposal in its entirety. From reading the posts on different discussion forums it's clear that, even if investors are self-assessing the tax, there's a risk that it's being done incorrectly. Wonder if they'll ask the platforms to set up systems for individual account calculation and then collect and pay over the tax for/to Revenue.

Of course they know how much is being collected; they’re just not including it in that reporting. There are separate boxes on the Form 11.

I asked for the figure last year.

In July they said it was included in the LAET figure

In September (after much probing and prodding) they told me that it wasn't.

They couldn't provide an actual figure, citing:

The declaration of dividends/gains from ETFs, and the associated tax take, cannot be separately identified from these returns, since the relevant fields include dividends/gains from sources other than ETFs.

That's the only evidence I have that they don't know what the actual figure is.

If it cant be measured, it cant be managed.
The exit tax on unit funds would not be significant. Most people hold these funds in a pension tax wrap.
I dont know how they would capture ETF exit tax.
Anyway, this could all change if the Govt. decide to simplify things.

fistophobia said:

If it cant be measured, it cant be managed.
The exit tax on unit funds would not be significant. Most people hold these funds in a pension tax wrap.
I dont know how they would capture ETF exit tax.
Anyway, this could all change if the Govt. decide to simplify things.

Click to expand...

In 2017, DIRT was €118m and LAET was €184m.

I would love to know how many people have ETF's that are subject to Exit Tax and just pay CGT on the disposal?