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Thread to discuss Life Assurance changes:
This thread summarises the up-to-date position on proposed changes to ETF taxation.
Investors in Irish-domiciled funds (including ETFs) are taxed differently than those who invest directly in shares.
1. Higher Tax Rate
The 41% exit tax that applies to gains on these funds, is significantly higher than the 33% Capital Gains Tax (CGT) applied to direct share investments.
This disparity is seen as a disincentive for Irish retail investors to use funds, which are often a more suitable and diversified investment vehicle for long-term saving.
2. Taxation of Unrealised Gains
The deemed disposal rule requires investors to pay the 41% exit tax on any gains every eight years, regardless of whether they have sold the asset.
This creates an administrative burden and can force investors to sell part of their portfolio just to pay the tax bill, undermining the principle of long-term compound growth.
3. Allowance for losses
Gains and losses on the underlying assets within a fund are offset against each other, but overall losses on a fund cannot be offset against other gains.
4. Reporting requirements
Investors in ETFs must calculate the tax themselves, which is non-trivial after the first deemed disposal or when purchased on a regular basis. They must register for Self-assessment and complete a more onerous tax return (Form 11).
In October 2024, the Government published a review of the funds sector, known as the Funds Sector 2030 report. This report was a key milestone in the debate and came after a public consultation.
The report made several recommendations to address the issues for retail investors:
Since the publication of the report, Finance Ministers Jack Chambers and Pascal Donoghue have backed the recommendations and answered parliamentary questions on the topic.
There is a commitment within the Programme for Government to progress and publish an implementation plan in Budget 2026 (Oct 2025), but changes may take place over multiple Finance Bill cycles:
https://www.oireachtas.ie/en/debates/question/2025-07-15/158/
However, there is no mention of exit tax or ETFs in the Budget 2026 Tax Strategy Group papers:
So it looks likely that some changes will be made in the lifetime of this Government, but we don't know exactly what or when.
Is the 41% Exit Tax Soon to be Scrapped? Michael McGrath to Review
3 PQs answered with 1 reply 15 July 2025 https://www.oireachtas.ie/en/debates/question/2025-07-15/158/ This is a complex area of taxation that encompasses a wide breadth of tax legislation on domestic funds, life assurance products and offshore funds. Detailed consideration is therefore being...
www.askaboutmoney.com
Thread to discuss Life Assurance changes:
Life Assurance Exit Tax (LAET) - Changes?
Would be helpful to all readers of the forum if you could refrain from mixing in ETF Exit Tax comments/opinions in this post. There's an entire sub for ETFs and another post on what changes are likely to be seen on those following the funds review. They're different products so best to have as...
www.askaboutmoney.com
This thread summarises the up-to-date position on proposed changes to ETF taxation.
The Problem with Funds
Investors in Irish-domiciled funds (including ETFs) are taxed differently than those who invest directly in shares.
1. Higher Tax Rate
The 41% exit tax that applies to gains on these funds, is significantly higher than the 33% Capital Gains Tax (CGT) applied to direct share investments.
This disparity is seen as a disincentive for Irish retail investors to use funds, which are often a more suitable and diversified investment vehicle for long-term saving.
2. Taxation of Unrealised Gains
The deemed disposal rule requires investors to pay the 41% exit tax on any gains every eight years, regardless of whether they have sold the asset.
This creates an administrative burden and can force investors to sell part of their portfolio just to pay the tax bill, undermining the principle of long-term compound growth.
3. Allowance for losses
Gains and losses on the underlying assets within a fund are offset against each other, but overall losses on a fund cannot be offset against other gains.
4. Reporting requirements
Investors in ETFs must calculate the tax themselves, which is non-trivial after the first deemed disposal or when purchased on a regular basis. They must register for Self-assessment and complete a more onerous tax return (Form 11).
Review of the Funds Sector
In October 2024, the Government published a review of the funds sector, known as the Funds Sector 2030 report. This report was a key milestone in the debate and came after a public consultation.
The report made several recommendations to address the issues for retail investors:
- Remove the eight-year deemed disposal rule.
- Align the tax rate on Irish-domiciled funds with the CGT rate of 33%.
- Allow for a limited form of loss relief.
Government Response
Since the publication of the report, Finance Ministers Jack Chambers and Pascal Donoghue have backed the recommendations and answered parliamentary questions on the topic.
There is a commitment within the Programme for Government to progress and publish an implementation plan in Budget 2026 (Oct 2025), but changes may take place over multiple Finance Bill cycles:
https://www.oireachtas.ie/en/debates/question/2025-07-15/158/
However, there is no mention of exit tax or ETFs in the Budget 2026 Tax Strategy Group papers:
41% Exit Tax - Will we see Budget 2026 changes
Setting this thread up to monitor any potential Budget 2026 changes to the 41% Exit Tax. Somewhat worryingly, I cannot find any mention of Exit Tax or ETFs in the Budget 2026 Tax Strategy Group papers https://www.gov.ie/en/department-of-finance/collections/budget-2026-tax-strategy-group-papers/
www.askaboutmoney.com
So it looks likely that some changes will be made in the lifetime of this Government, but we don't know exactly what or when.
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