41% to 38% exit tax on Unit Linked Investments

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Pieface

Registered User
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Hi,
I made the purchase 9 years ago, and the exit tax have been deducted at the end of 8 years at 41%. If I dispose them on 02/01/26 how will the final exit tax be calculated when the rate will 38%? Will all the gain (sales proceeds less purchase cost) be taxed at 38% and I would most likely be due a refund; or will the 38% only apply to gains between 31/12/25 and 02/01/26?

The above is just an example for me to figure out if I should dispose of my investments in 2025 or wait till 2026.

Thank you.
 
Yes, the 38% tax on the total gain since purchase is reduced by the tax paid on the Deemed disposal

So you could be due a refund if the tax on the Deemed disposal is greater than the tax due on the actual disposal
 
This thread, and this post in particular, might be of relevance here?

Key Post - Strategy around the 8 year deemed disposal

I have no practical experience of this and I have recently been asked about it. (It's a mad system but this is not a thread for letting off steam about it.) First to clarify how it works. I bought a unit-linked fund for €100k 8 years ago. Today, it's worth €140k. The fund deducts 41% tax...
www.askaboutmoney.com
 
Pieface said:
Will all the gain (sales proceeds less purchase cost)
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Gain is sales proceeds plus 8 year exit tax paid less purchase cost.

Exit tax payable is (gain x 38%) less 8 year exit tax paid. If the result is a negative figure, it's a rebate that will be paid to you.
 
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jpd said:
think that only applies if you sold some of the ETF to pay the tax
Click to expand...
Thread title is unit linked investments, so I'm taking it to be a life assurance policy or similar
 
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Does the 38% applicable to deemed disposals due in early 2026 apply to the entire amount or the amount earned since 1st Jan 2026.
 
Doesn't it (38% tax rate) apply to the full gain since purchase and you get a credit for any deemed disposal tax previously deducted (at 41%) when calculating the final exit tax liability or refund?
 
Yes, the new LAE rate from 01/01/26 applies on the occurrence of any chargeable event on a policy. The current rate of tax is applied to any gain at that event i.e. the applicable LAE rate at the date of the event is used to calculate the tax due on the entirety of the gain.

I’ve never seen an updated version of this document from Revenue since 2012 however the principals remain the same. There are some useful examples start at page 31.
https://www.taxfind.ie/binaryDocume..._en_practitioner_tech_guide_joelife03_pdf.pdf
 
Mind boggling - how on earth do they expect an investor to calculate the tax due on an ETF themselves

I have some ETFs now coming up to their third deemed disposal - and the information I got in writing from Revenue on the tax calculation contradicts all the information in that document. I am 99.9% certain that the written reply I got from Revenue is wrong but they confirmed it was correct when I queried it.
It will be interesting to see what happens next time round
 
Bizarre that the question relates to LAET and all some folk want to talk about is ETF Exit Tax. There's a whole forum for EFTs. No one is going to be able to understand the replies if you mix the two.

For clarity, the investor has to do no calculation at all under LAET. Product provider manages the tax for you.

Gerard

www.bond.ie
 
ClubMan said:
This thread, and this post in particular, might be of relevance here?
Click to expand...
That post is incorrect. The tax needs to be added back to the gain before it is deducted, as described here:

Key Post - Strategy around the 8 year deemed disposal

I sold one of my ETFs in January 2023. This was the first disposal for many years. I am thinking of disposing of them all and just buying a selection of shares. But for S&P 500 or NASDAQ this is quite messy I have asked Revenue how I should account for this in my Form 11 return next year -...
www.askaboutmoney.com
 
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