ETFs taxation issue

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daheff

Registered User
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Hi all

I've made some gains on ETFs in 2016, and some small gains (below exemption) in equities.

I've submitted CGT return for equities (back in 2016) and Form 11 (Section E) for ETFs. I also sent a cheque for the tax due on the ETFs (calculated at 41% -think now it should have been 40%).

Problem I'm having now is revenue seem to have different people looking at it and everybody has a different view. Some people are telling me ETF Form 11 @40% is correct, others are then telling me its CGT return (And late!) @ 33%.

Anybody else have similar issues? Or can guide me to somebody who can properly look at this in Revenue?

any help/guidance is much appreciated
 
For what its worth, I found out recently that Rabodirect funds (closed down since April 2017 were "ETFs" to be treated as "offshore funds" and therefore are Income Tax'ed at 40% on the Form 11 and are not CGT relevent and also therefore you can't rollover or offset losses annually as well as being subject to a higher tax rate.
So I declared my (very modest) Rabodirect fund gains on the Form 11 foreign income section I think.

I notice on the Form 11 online calculation that unlike rental property profits you are not subject to USC and PRSI (bringing the marginal tax rate to 52%) but "just" the 40%.
 
Like bmount, mine were Rabodirect funds & are Irish domiciled ETFs.

I've just had response form somebody else in Revenue now telling me hes amended the CGT computation to NIL and wants a full Form 11 (rather than just Section E I've previously provided).

this is getting very very painful.
 
Sarenco said:
The funds distributed by Rabo were not ETFs.

In any event, your gains are taxable at 41% and should be reported on Form 11 (line 322(c)).
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Yeah which I have. But everybody I speak to in revenue has a different view on it! Its painful to deal with.

Why do you think Rabofunds are not ETFs? Or am I mixing this up with Irish domiciled funds??

I've also been told 40% rather than 41% (well was also told 33% & cgt with annual exemption, but i've told them thats wrong)!
 
daheff said:
Why do you think Rabofunds are not ETFs?!
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ETF is an abbreviation for "exchange traded fund" (i.e. the shares in the fund are traded on a regulated market). The mutual funds distributed by Rabo were not exchange traded.

I'm afraid I can't explain why any Revenue officials insist on giving taxpayers bad advice - the correct position is very clear.
 
Sarenco said:
ETF is an abbreviation for "exchange traded fund" (i.e. the shares in the fund are traded on a regulated market). The mutual funds distributed by Rabo were not exchange traded.

I'm afraid I can't explain why any Revenue officials insist on giving taxpayers bad advice - the correct position is very clear.
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Maybe it's a case of Garbage In Garbage Out. They can only go on what info they're given. And it's a self assessment system, Revenue aren't in the tax advice business, it's up to joe punter to establish what they've invested in and what the tax treatment is.
 
Never ever go to Revenue for advice.

For every competent member of staff, there are four others who either haven’t a clue or believe nobody should have any money.
 
Gordon Gekko said:
Never ever go to Revenue for advice.

For every competent member of staff, there are four others who either haven’t a clue or believe nobody should have any money.
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Agree with the first sentence.

Second one is, with respect, rubbish. The reality is that, unsurprisingly, the lowest paid frontline staff are the least expert. As it should be in any similar large organisation. They're in the unenviable position of being under pressure from their own management to escalate as few items of correspondence as possible and deal as quickly as possible with as many work items as possible, as well as having to deal with joe public who expects (and in general gets) a good service. A very thankless job.

I dare say Gordon, that you get paid better than a CO working customer service in Revenue, and are under less time pressure when you need to figure out something a bit unfamiliar or complicated, rather than being expected to do it on the hoof while your client is on the other end of the line.
 
torblednam said:
And it's a self assessment system, Revenue aren't in the tax advice business, it's up to joe punter to establish what they've invested in and what the tax treatment is.
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Yes, i fully appreciate that.

However, i am surprised that junior Revenue employees aren't instructed to decline to offer any advice beyond pointing taxpayers to their published guidelines on any particular matter.
 
Sarenco said:
Yes, i fully appreciate that.

However, i am surprised that junior Revenue employees aren't instructed to decline to offer any advice beyond pointing taxpayers to their published guidelines on any particular matter.
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Well neither you nor I are privy to the detail of the conversation. If the customer says, I've made a gain on an Irish domiciled ETF, where do I put it, then they can read him the answer to the question.

The answer is right based on the question asked, but results in a wrong return only because the information given was wrong.
 
@torblednam

The correct tax treatment of a gain on an Irish-domiciled ETF or any other UCITS fund would be identical - neither of the treatments advised by the relevant Revenue employees (per the OP's report) would have been correct.

If they don't know the answer to a question posed by a taxpayer why offer any opinion at all? As you correctly point out, they are not in the advice business - so why are they offering (incorrect) advice?
 
Sarenco said:
@torblednam

The correct tax treatment of a gain on an Irish-domiciled ETF or any other UCITS fund would be identical - neither of the treatments advised by the relevant Revenue employees (per the OP's report) would have been correct.

If they don't know the answer to a question posed by a taxpayer why offer any opinion at all? As you correctly point out, they are not in the advice business - so why are they offering (incorrect) advice?
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I think you miss my point because I've used a poorly worded example - since neither you nor I know exactly what way the conversation went, we can't say that the taxpayer was given wrong advice.

I agree with you, if they don't know the answer they can't / shouldn't give one. But if they're asked a question that they can see the answer to in their manual then they absolutely should give it, and point the taxpayer to the relevant material.

I don't think it would be fair for Revenue to refuse to offer any assistance to their customers, but at the same time there has to be a reasonable limit to what constitutes an acceptable level of service. They do commit to providing services to help people to voluntarily comply with their obligations:
https://www.revenue.ie/en/corporate/documents/governance/sos-2015-2017.pdf
 
@torblednam

And I think you may be missing my point - the answers given would have been incorrect regardless!

An Irish or EU domiciled mutual fund or ETF would be subject to the same tax treatment - none of which correspond with the answers offered by the relevant Revenue officials! They very clearly weren't reading from a manual - they were making it up off the top of their heads.
 
Sarenco said:
@torblednam

And I think you may be missing my point - the answers given would have been incorrect regardless!

An Irish or EU domiciled mutual fund or ETF would be subject to the same tax treatment - none of which correspond with the answers offered by the relevant Revenue officials! They very clearly weren't reading from a manual - they were making it up off the top of their heads.
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We're going around in a circle here. We DON'T KNOW exactly what question was put to them. They may have been genuinely wrong, they may have made up an answer, or they may not have been given the correct information. We simply don't know.

I'm not saying nobody ever gets a wrong answer when they call Revenue, but I take issue with Gordon's assertion that 80% of their staff dealing with customers are incompetent. I'd be surprised if the quality of responses to queries fielded by Revenue differs materially from the answers people get from their own accountant in most cases.

Except for people are paying top dollar for their tax advice. Unfortunately, while people may have their views on how well paid our public servants are, they're not paid so well as to provide the same quality of service as a Big 4 firm, for free to the taxpayer.
 
Last edited:
Daheff ,Instead of ETFs, My Rabo offshore fund was described as UCITS, or Luxembourg based SICAVS, for CGT on form 11. Hope this helps.
 
torblednam said:
Agree with the first sentence.

Second one is, with respect, rubbish. The reality is that, unsurprisingly, the lowest paid frontline staff are the least expert. As it should be in any similar large organisation. They're in the unenviable position of being under pressure from their own management to escalate as few items of correspondence as possible and deal as quickly as possible with as many work items as possible, as well as having to deal with joe public who expects (and in general gets) a good service. A very thankless job.

I dare say Gordon, that you get paid better than a CO working customer service in Revenue, and are under less time pressure when you need to figure out something a bit unfamiliar or complicated, rather than being expected to do it on the hoof while your client is on the other end of the line.
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QED

Anyone who dishes out answers to complex queries on the hoof in such a manner is, quite frankly, an idiot.

I also wouldn’t dismiss the idea of bias; Revenue’s agenda is to collect as much tax as possible on behalf of the State. It is not an independent font of knowledge, and contains many zealots with peculiar views on wealth and how it should be taxed.
 
Gordon Gekko said:
QED

Anyone who dishes out answers to complex queries on the hoof in such a manner is, quite frankly, an idiot.

I also wouldn’t dismiss the idea of bias; Revenue’s agenda is to collect as much tax as possible on behalf of the State. It is not an independent font of knowledge, and contains many zealots with peculiar views on wealth and how it should be taxed.
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So you stand over your assertion that 80% of Revenue staff are incompetent?
 
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