Business Post - Minister [Troy] says ETF deemed disposal will be addressed in the Budget: ‘It’s from a bygone era’

[yellowmoose]

The deemed disposal rule and higher rate of tax on investment fund gains are products of a “bygone era” that will be addressed before the launch of new personal investment accounts, a government minister has said.

Robert Troy, a minister of state at the Department of Finance, told the Business Post changes to deemed disposal, the eight-year mandatory taxation on unrealised, paper gains for investments like exchange-traded funds (ETFs), were coming soon.

“I think you will see it being addressed as part of the budget,” he said.

Business Post [Paywall]

 

[Setforlife]

Vague but encouraging that seems to be saying it will need to be sorted to align with new savings account:

“And it needs to be addressed… before any new savings and investment account is launched.”
The minister of state, who has special responsibility for financial services, said the government “can't have different taxation rates for different products”.
“It's a product of a bygone era. It was done for a particular reason at a particular time – that's no longer the case.”

 

[Uafásach]

If it is addressed - I wonder will it be from a date going forward or will it be retrospective?

 

[jpd]

Let's wait and see - could be a junior minister getting it wrong or floating an idea to see what traction, if any, it gets

 

[Steven Barrett]

I wonder will be be from a date going forward or will it be retrospective?

It won't be retrospective. Most likely come into effect from 1 January 2027, like almost everything else does in a Budget announcement when the Finance Bill becomes law.

If you triggered a deemed disposal date in 2026 but have it through an online broker and so not due to pay it until next year, I expect that this will still be due to be paid.

 

[Wolframius]

It won't be retrospective. Most likely come into effect from 1 January 2027, like almost everything else does in a Budget announcement when the Finance Bill becomes law.

There are different degrees of retrospective. Hypothetically, if it comes into effect from 1 January it means that only the funds bought after that date are exempt and all the one bought before that date will have to go through one last round of DD, or that after that date no DD triggers would happen?

 

[Fortune]

after that date no DD triggers would happen?

This is most likely. The current calculations allow for deemed exit tax already paid. With not future events triggering a deemed disposal, this would be the cleanest method

 

[Steven Barrett]

ought before that date will have to go through one last round of DD

I would be amazed if DD went on until 31 December 2034.

 

[faketales]

Could the state that all DD happens on Dec. 31 2026 regardless of when you bought and then be done with it?

 

[BigBoots82]

Could the state that all DD happens on Dec. 31 2026 regardless of when you bought and then be done with it?

Dont think that is realistic. What about people who have obtained financing based on an 8 year investment horizon? Wouldn't be a good look

 

[PolkaDot]

To relieve yourself of the DD admin burden, one option is to just liquidate your investment in Jan 2027, pay the tax on any earnings, and then reinvest into the same investment?

 

[Nordkapp]

Governments on investment topics over commit and under deliver . DD won’t be abolished in one budget.

 

[Steven Barrett]

Governments on investment topics over commit and under deliver . DD won’t be abolished in one budget.

I have given up on being hopeful of meaningful changes to investments. At this stage, I will wait until it is actually implemented before I believe it. I expect there will be something thrown in there that doesn't make any sense.

 

[BigBoots82]

Agree with the over promise and under deliver. Like abolishing DD only for the Irish ISK account investments

 

[Setforlife]

Governments on investment topics over commit and under deliver . DD won’t be abolished in one budget.

Agree it doesn’t match the history, but they have been pushed on this by the providers who say they can’t cope with an immediate landslide exodus from their current products to the new account without deemed disposal and much better tax treatment. Some level of harmonisation is needed from launch.

 

[jpd]

Sounds like a recipe for a clumsy, ill-thought out system which will need fixing down the line - as indeed, did the gross roll-up introduced in 2001

So instead of simplyfying investing, my money is on it becoming far more complicated with multiple flavours all vying for your money - great business for all the financial advisors

 

[Persia]

Sounds like a recipe for a clumsy, ill-thought out system which will need fixing down the line -

You have just summed up FFG govt policy in one neat sentence. Everything from the rental market to Creches. Clumsy and ill thought out fits like a tailor made suit

 

[jfrank]

Everything from the rental market to Creches. Clumsy and ill thought out fits like a tailor made suit

Thank God I never got involved in private rentals. Just reading the threads here and government has conspired, along with a media that just demonises landlords, to make private rentals a No-Go area for savings

 

[Zenith63]

government has conspired, along with a media

"Never attribute to malice that which is adequately explained by stupidity." - Hanlon’s razor

 

[Duke of Marmalade]

Another legacy issue with stopping DD in its tracks is how to treat losses. Admittedly these may be limited.