Trex210777
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Shares or property for CGT treatment?I'm seriously considering getting out of this and putting my money somewhere else. Any tips? TIA
Is it not more simple than that, after 12 years the total gain is 259 euros minus 100euros = 159 eurosIt’s a while since I looked at it, but my understanding is that, let’s say:
- You stick in €100
- After 8 years, it’s worth €200
- After 12 years, you sell it for €259
So after 8 years, your deemed disposal charge is €41 (i.e. 41% of the €100 deemed gain).
Then after 12 years, that €41 tax on the deemed gain is added back to the €259 to give a notional value of €300.
Then 41% tax on the €200 gain is €82, less the €41 you’ve already paid, so just a further €41 to pay.
I’m open to correction and not 100% sure, but if I had to stake my last tenner one way or the other, I think it’s the way I described it. Something in the back of mind is saying that you add the tax back in and pretend the 8 year deemed disposal part never happened and then just take a credit for what was paid.Is it not more simple than that, after 12 years the total gain is 259 euros minus 100euros = 159 euros
the total tax is 41% of 159 euros = 65.19 euros
but because you already paid 41euros deemed disposal tax at year 8 then the residual tax due is
65.19euros - 41euros = 24.19euros
Also if at year 12 the value of the fund happened to fall back to for example 150euros well then revenue owes you back half the deemed disposal tax paid at year 8 because the fund value has now fallen below the deemed disposal value at year 8 of 200euros
Are you a fishmonger or something?I’m open to correction and not 100% sure, but if I had to stake my last tenner one way or the other, I think it’s the way I described it.
I'd trust Dominic Coyle as far as I could throw some other posters here. He's got a terrible track record of making egregious mistakes.I had to check this myself recently and this article seems to confirm Gordon's methodology:
Is Zurich looking to take too much tax out of my investment fund?
Q&A: Dominic Coyle answers your personal finance questionswww.irishtimes.com
Yes, harsh in a way, in that you could argue it’s a form of retrospective taxation if the rate has increased.I had to check this myself recently and this article seems to confirm Gordon's methodology:
Is Zurich looking to take too much tax out of my investment fund?
Q&A: Dominic Coyle answers your personal finance questionswww.irishtimes.com
Yes, but shellfish only. Higher margins.Are you a fishmonger or something?
Deemed Exit Tax 2017 | |
Gross Value(GV) | €34,108.39 |
Eligible premiums(EP) | €24,403.98 |
Profit (GV - EP) | €9,704.41 |
Tax (Profit x 41%): | €3,978.81 |
This is the Deemed Exit Tax(DET) figure. | |
Withdrawal 2020: | |
Gross Value | €10,658.78 |
Eligible premiums: | €7,630.13 |
Profit (GV - EP) | €3,028.65 |
DET | €988.08 |
Tax ([Profit + DET]*41%-DET) | €658.78 |
Net Surrender (GV - Tax): | €10,000.00 |
The Eligible premiums & DET have been proportioned by the withdrawal amount over total value on the plan as it should. | |
Current Surrender breakdown: | |
Gross Value | €42,212.25 |
Eligible premiums | €28,058.80 |
Profit (GV - EP) | €14,153.45 |
DET | €2,990.74 |
Tax ([Profit + DET]*41%-DET) | €4,038.38 |
Net Surrender (GV - Tax) | €38,173.87 |
In the current breakdown, the eligible premiums and DET amounts have been reduced by the amounts used in the previous Withdrawal. |
Deemed Disposals | | | | Actual Disposals | | |
Yr | Value | Tax | | Yr | Value | Tax |
1 | €100,000 | €0 | | 1 | €100,000 | €0 |
8 | €200,000 | €41,000 | | 8 | €200,000 | €41,000 |
16 | €300,000 | €57,810 | | 16 | €300,000 | €41,000 |
20 | €400,000 | €64,702 | | 20 | €400,000 | €41,000 |
| | | | | | |
| Total | €163,512 | | | Total | €123,000 |
You seem to have asked for €10k clear after tax.Hey, could someone double-check the figures I posted. The withdrawal I made in 2020 is throwing me a bit and I can't for the life of me get the figures to match
Thanks @Duke of Marmalade. Could the fact that the DET rule came into effect from 10 October 2018 have something to do with it?You seem to have asked for €10k clear after tax.
So they had to work backwards to see how much of your gross value you had to cash to pay the tax and leave 10k net, the answer they came up with is €10,658.78.
The tax is calculated as GG says. and as is set out in the figures you supplied.
If you add the "Withdrawal 2020" box to the "Current Surrender breakdown" box you get the position were you to encash the whole lot. The tax would be €658.78 + €4,038.38 = €4,697.16. This is correct and follows GG's method (I can demonstrate this if you require). So overall no issue.
Because you are making a partial encashment they have to divie this tax up. To do this they have to divie up the eligible premiums and the DET. It is a mystery how they did that (it is not "proportioned by the withdrawal amount over the total value", as they assert but don't complain). It provides a "favourable" result as the tax on your partial encashment is only 6.18% but this is cancelled out by the fact that the tax on what you have left, if you were to encash tomorrow, is 9.57%.
One thing puzzles me. You say you have the plan for 20 years but there seems to be only one DET.
Don't get you there. You yourself were subject to DET in 2017. I think it has been there almost from the start in 2001. Anyway I think I know what they do; they must accumulate all the previous DET calculations into the latest but they only pay over to Revenue the difference from the previous accumulation, it is all seamless to you.Thanks @Duke of Marmalade. Could the fact that the DET rule came into effect from 10 October 2018 have something to do with it?
If the total tax due amount is €4,697.16...if I were to cash in the full value, should that not be reduced by the amount of tax I already "prepaid" to revenue in 2017 to the value of €3,978.81 ??? This was handled by the fund manager. I didn't have to do anythingThanks @Duke of Marmalade. Could the fact that the DET rule came into effect from 10 October 2018 have something to do with it?
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