Revenue have published an update to Part 27-04-01 which concerns the criteria for establishing whether an investment if subject to the Exit Tax or not
Have to say it is as clear as mud to me
Have to say it is as clear as mud to me
Cant understand why revenue just dont treat all ETFs like shares with gains subject to CGT and dividends (payouts not accumulated) treaded as income. Would make life easy for everyone and the taxman would still be happy.The guidance has been updated to include a non-exhaustive list of general legal and regulatory criteria that should be considered to assist in establishing whether the threshold of “similar in all material respects” is net when determining the equivalent nature of an offshore fund to its Irish counterpart.
The criteria in the guidance is cast in extremely broad terms and, in my opinion, it makes it increasingly challenging to maintain an argument that a US ETF that is registered with the SEC is not “equivalent” to an ETF that is authorised as an Irish UCITS.
Others might take a different view.
Nope.Does this note clarify anything about the tax treatment of UK Investment Trusts?
The criteria in the guidance is cast in extremely broad terms and, in my opinion, it makes it increasingly challenging to maintain an argument that a US ETF that is registered with the SEC is not “equivalent” to an ETF that is authorised as an Irish UCITS.
Others might take a different view.
Yes as @Duke of Marmalade said it's basically a stitch up between revenue and the financial guys to scare people away from ETFs, that way the financial guys benefit because ordinary investors have to buy their services in order to navigate this , and the revenue benefit because the financial guys do all the taxation returns rather than thousands of individual returns that revenue would then have to look into themselves. They don't have the manpower or even the expertise to do this themselvesThis document is not useful to retail investors. More likely it's so Revenue can quote from it, to dispute ones tax return. These products are meant to be user-friendly, with KIIDs to explain to punters in baby language. They don't want people investing in ETFs, that's what I think.
Surely you mean that many individual investors do not have the expertise.They don't have the manpower or even the expertise to do this themselves
Here in Germany the financial institutions have to do all the heavy tax lifting stuff for the retail investor. I only have to submit that part of the tax return governing withholding tax if I am expecting to claim overpaid withholding tax back, otherwise it's like DIRT in Ireland (from the customer's perspective). The tax is deducted at source like DIRT and forwarded to the tax man. I don't understand why the state can't force Irish financial institutions to do the same for Irish customers. You get a certain tax free allowance here in Germany as well so a single person can earn up to €1000 year in interest or dividends or whatever (it's all lumped together under that tax free allowance) and you divide the allowance up yourself between the banks you have dealings with, assigning sensible portions of it to each, depending on how much you have on deposit/invested with them. If you remain below the apportioned threshold with a given bank/broker etc. they will not deduct any tax at source at all. You can reapportion the tax free allowance as you need it if you haven't used it already by say selling some ETFs. The portion "used up" then gets locked until the end of the year and your tax free allowance at that institution can't be set below what has been availed of. In theory you could assign the full 1k allowance to all your banks except you will be caught as the banks all report what you declare back to a central system that simply adds them up and notifies your tax office if you are being naughty.Surely you mean that many individual investors do not have the expertise.
I remember people having this exact question back then on these forums, what do you do with US dom ETFs purchased prior to 1 January 2022? There was no definite answer then but the consensus advice was that people needed to sell their ETFs before January 2022 in order that they be taxed under CGT for sure. Why didn't they clarify that back then that the clock only started running from 1 January 2022 and that they actually didn't need to rush out and sell those ETFs, they still had 8 more years before any deemed disposal tax was payablePractitioners queried how the updated guidance, which stated that previous Revenue confirmations in respect of the treatment of ETFs would no longer apply from 1 January 2022, would impact someone acquiring an interest in an ETF in 2020 or 2021. Revenue noted that the updated guidance will only apply as of 1 January 2022.