I'm not sure the life industry would be cheering for this. That all matters tax are taken care of by the life company is a major selling point for their product. The Revenue would be even less enthusiastic as hundreds of thousands of humble taxpayers need to make fairly complex adjustments to their PAYE disclosures. The level of non compliance, inadvertent or otherwise, would be enormous. I remember when tax on deposit income was the responsibility of the punter - tax collected was miniscule - hence the introduction of DIRT.
Maybe that's the real reason behind all this, however they need to get with it and enter the 21st century because ireland is an outlier here.
We are where were we are. Introducing for the very first time an onus on individual life policyholders to account for their tax liabilities would be a total fiasco and would for sure decimate the tax take; as I say through non compliance either inadvertent or otherwise and as for the transition for existing policyholders, I simply won't go there.
Ireland's GDP has increased from $100bn to $500bn this century. That is one heck of an increase in the tax paying power of the economy. Do you think that growth is courtesy of leprechauns mining at the end of a rainbow? Have you noticed how we are no longer ashamed when our Northern brethren travel south on to our suberb motorway network?
Indeed but that is the source of the problem. As I understand it some were taxed in this natural way but that put them at an advantage over mainstream collective vehicles - an anomaly which I understand the Revenue has moved to remove.
Duke, lots of people in the Revenue don't know how to handle the taxation of ETFs either!!! As well as accountants and tax advisors.
I was querying the relative time value for money between the Tax Man and the investor. Your sums are based on a 7% p.a. gap in favour of the investor. The Tax Man can always invest in ETFs if it so desires so to base an argument on the superior time value of money to the investor is erroneous. What your argument boils down to is "let the investor hold on to the deemed tax as it will grow at 7% p.a. and you will get the CGT on the gain". That is a big drop for the Tax Man.
Well the way the Irish sovereign wealth fund has been invested is fairly bad, I heard on newstalk that alot of it is invested in government bonds, maybe even irish ones. They themselves should be investing in etfs
I just wrote to him. Thanks for the nudge!
I have seen advice on other sites advising people to move to UK or NI to take advantage of all the investor tax breaks there vis a vis Ireland , tax free ISAs and £12000 CGT tax free allowance per year. I think it must be coming through on the grapevine now to government that they are preventing high skilled and high paid people moving to Ireland because of this taxation and restrictive investment environment.
I tend to agree. 41% is probably a reasonable blend of what you'd pay if the capital gains and dividends were taxed separately.
Ireland uses taxation policy to attract the best of international investment since the 1980s, but individually we then have this strangely draconian taxation policy. Yes 41% taxation is draconian because nobody else in the OECD imposes it , only us, we are an outlier, but now it is getting out there that Ireland especially is unattractive for individual highly specialised people to move to. That explains why doctors are choosing to move to UK even at lower salaries and not to Ireland.