I think everyone here would like to sign this petition to remove the use of exit tax / deemed disposal on ETFs (please share it far and wide!)
ETFs in Ireland?
- Thread starter TSR1000
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hughpearse
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They have provided a nice flowchart to assist with any confusion:
Tax and Duty Manual Part 27-02-0: Offshore Funds: Taxation of Income and Gains from certain offshore states
Decision Tree 1: Is the investment an investment in an ‘offshore fund’?
I don't like DD as much as anyone else, the question is what should it be replaced with?I think everyone here would like to sign this petition to remove the use of exit tax / deemed disposal on ETFs (please share it far and wide!)
For instance, Switzerland taxes non-distributing ETFs as if they were distributing. The US bans non-distributing ETFs for the same net effect. If the proposal is to abolish it, and not have any other claw back mechanism, that's not a realistic proposition, and campaigns such as these will continue to fall on deaf ears.
@nest egg , ireland is a complete outlier with regard to exit tax. Using Switzerland as the basis for ETF taxation is hardly a great example. Switzerland is infamous for secrecy and as a haven for rich people to shelter their wealth from taxes elsewhere . It also serves as a safe haven for russian oligarchs and African dictators.
The fact is that ireland is unique among our European contemporaries in having this exit tax regime for simple execution ETFs that have the exact same tickers etc as normal shares. The reason for this is that nobody else places this distinction between ETFs and shares. If that was the case the tickers would have been constructed differently. The reason why ETFs were invented in the first place was to make it simple for investors to buy and sell them
The fact is that ireland is unique among our European contemporaries in having this exit tax regime for simple execution ETFs that have the exact same tickers etc as normal shares. The reason for this is that nobody else places this distinction between ETFs and shares. If that was the case the tickers would have been constructed differently. The reason why ETFs were invented in the first place was to make it simple for investors to buy and sell them
As an Irish investor, I am faced with
Buy ETFs and face higher taxes but get diversification
Or
Buy individual shares, hard to diversify but better tax.
This is a small investor problem in particular. Small investor equals most investors.
No justifiable reason for keeping existing tax structure for a distributing ETF.
Buy ETFs and face higher taxes but get diversification
Or
Buy individual shares, hard to diversify but better tax.
This is a small investor problem in particular. Small investor equals most investors.
No justifiable reason for keeping existing tax structure for a distributing ETF.
US and CH are two countries I've worked in, and am familiar with their taxation systems, which is why I referenced them. Your comment on secrecy has no bearing on the point.
Although the method is unique, Ireland isn't unique in getting its pound of flesh, which is the point.
I expect most investors do not have a problem with paying tax on their gains. My concern with deemed disposal is how unnecessarily complex it makes what should be a simple investment method. The rules are not only complex (can you imagine how painful it must be to do a tax return if you were making monthly ETF investments, perhaps of varying size) but are not even completely clear as evidenced by some of the long discussions on AAM. Even Revenue themselves do not seem to be completely sure how to apply their own rules for ETFs. In the end it must surely put off many small investors from even attempting to invest using a method that is low cost and simple in so many other countries.