alwaysonit
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With CGT at 33% and income tax between 20% and 40% here are the most tax efficient approaches I am aware of:
1. Find an investment that can be held long term, that is subject to CGT.
An option here is a conglomerate which imitates an ETF but does not have deemed disposal tax.
Pay the 33% CGT on gains whenever it is sold. Sell the tax free allowance amount €1,270 each year it has gone up, then possibly reinvest it.
2. For those with low income or solely living off investment returns - find an investment where the returns is classified as income, rather than capital gains. I am not well versed in such investments so feel free to share.
Utilise tax free allowance (the first €1,700 of tax) and the lower tax band tier (20% up to €36,600).
3. Utilise approach 1 above, but travel for 4 years when you are at the age you need to sell the investments. You can still spend up to a few months in Ireland each year. Sell it in year 4 when you are no longer an ordinary tax resident of Ireland, ideally paying little to no tax in wherever you decide to become a resident in this time. You can become an Irish resident from year 5 onwards.
Obviously option 3 is extreme, but would suit some with a large net worth and no urgent need to be in the country.
Either way the CGT of 33% is extortionate and leads us to search for ways to minimise it.
Please share any other approach that you have considered or taken.
1. Find an investment that can be held long term, that is subject to CGT.
An option here is a conglomerate which imitates an ETF but does not have deemed disposal tax.
Pay the 33% CGT on gains whenever it is sold. Sell the tax free allowance amount €1,270 each year it has gone up, then possibly reinvest it.
2. For those with low income or solely living off investment returns - find an investment where the returns is classified as income, rather than capital gains. I am not well versed in such investments so feel free to share.
Utilise tax free allowance (the first €1,700 of tax) and the lower tax band tier (20% up to €36,600).
3. Utilise approach 1 above, but travel for 4 years when you are at the age you need to sell the investments. You can still spend up to a few months in Ireland each year. Sell it in year 4 when you are no longer an ordinary tax resident of Ireland, ideally paying little to no tax in wherever you decide to become a resident in this time. You can become an Irish resident from year 5 onwards.
Obviously option 3 is extreme, but would suit some with a large net worth and no urgent need to be in the country.
Either way the CGT of 33% is extortionate and leads us to search for ways to minimise it.
Please share any other approach that you have considered or taken.
