Is the 41% Exit Tax Soon to be Scrapped? Michael McGrath to Review

Does that mean the government aren't planning in addressing this issue until 2030 ?
Only thing that I can think of that might delay a reduction in the rate in the Budget this year and some action on 8 year DD is :

DoF - Well lads, how much is this going to cost?
Revenue - It's like this, we know to the cent what the implications might be for LAET but we're a bit vague on this whole self-assessed ETFs stuff
DoF - Say what...?
 
Thursday, 20 March 2025
In October 2024, my predecessor published the ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’, a wide-ranging review of the funds and asset management sector. The Review fulfilled certain recommendations of the Commission on Taxation and Welfare 2022 report which called for, among other things, an examination of the taxation regime for funds and life assurance policies, with the goal of simplification and harmonisation where possible.

The Report arising from the Review sets out a series of recommendations to ensure that, in pursuit of continued growth in the funds and asset management sector, Ireland’s funds sector framework remains resilient, future-proofed, supportive of financial stability and a continued example of international best-practice.

The 2025 Programme for Government has committed to progress and publish an implementation plan taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow this sector in Ireland and I, working with my officials, will consider next steps in this regard over the coming months.
 
Pascal donohue back as minister for finance, he has been very bad on this whole area, Jack chambers was a breath of fresh air, hopefully he is driving donohue to get moving on what himself and his predecessor started
 
DoF - Well lads, how much is this going to cost?
Revenue - It's like this, we know to the cent what the implications might be for LAET but we're a bit vague on this whole self-assessed ETFs stuff
DoF - Say what...?
My experience is that the Revenue really haven't a clue when it comes to self assessment tax on ETFs. It was all set up with the intention that the life companies would do all the work and they'd just cash the cheque. Then investment platforms became a thing and suddenly they had to figure out how it worked.

I have a case where a client on a platform paid his deemed disposal from other funds. He cash out his investment the following year. According to the Revenue's Investment Undertakings Guidelines 2016, he is supposed to add the deemed disposal amount to the final cash in value to calculate the final tax due and then offset it. If he does this, his tax on gains increases from 41% to 51%. I enquired with the Revenue 4 months ago on this matter. Never heard back. I am presuming because they don't know the answer. I would be pretty sure that if the client paid in 41% of his gain, it would be accepted.

From an admin point of view, I'd say the Revenue are perfectly happy for it to move under the established CGT rules.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
PQ reply 28 May 2025

The 2025 Programme for Government has committed to progress and publish an implementation plan for consideration in Budget 2026 taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow this sector in Ireland.

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 given to the best way to bring about the necessary reforms and to support a greater level of retail investment in capital markets. It is likely given the breadth of the Funds Sector 2030 review that the delivery of associated tax measures may take place over multiple Finance Bill cycles. This work will also take account of developments at an EU level in respect of the Savings and Investment Union.
 
That's good news but looks like as others have said they were pushed to act by Europe. It's amazing the trillions of euros of ETFs domiciled in Ireland did not receive more attention. The extremes in Irish tax policy whereby on the one hand they make Ireland the most attractive country in Europe to domicile ETFs and at the same time make it the most punitive in Europe for domestic population to actually invest in those very same ETFs
 
Is it safe to assume that if I were to open an ETF now, invested in a World Equities index fund, in 8 years time that investment will be subject to CGT? Or should we wait until Budget 2026?
 
in 8 years time that investment will be subject to CGT?
Previously, when the government changed the tax rate (or made the deemed exit tax tweak), existing investments just got the new rate. But when the system changed (from net to gross roll up), existing investments kept the old treatment (and still do) and new investments were under the new treatment.
 
From what I've heard it's Revenue that are pushing back on the changes. They see reducing the rate as a large "cost" to them and are incapable of comprehending that a reduction in rate and simplification will actually encourage more people to invest and thus actually increase the overall tax take. If they don't have a solid number for that on a spreadsheet then computer says no.
 
are incapable of comprehending that a reduction in rate and simplification will actually encourage more people to invest and thus actually increase the overall tax take.
Revenue is one of the best run areas of government with some of the sharpest people I’ve encountered, you can be absolutely certain that a lack of comprehension of this basic premise is not a factor.
 
Revenue is one of the best run areas of government with some of the sharpest people I’ve encountered, you can be absolutely certain that a lack of comprehension of this basic premise is not a factor.
Same can't unfortunately be said for our finance ministers or politicians in general.
 
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At the turn of the year we were told these changes were under consideration for this years finance bill, it appears that was never the case and has been put on the long finger. The Dail transcript from yesterday suggests these changes are 'costly' and will not be happening any time soon which is very disappointing but hardly surprising.

Essentially no ISA, no change to the 41% exit tax and not even a mention of deemed disposal as part of their attempt to achieve a 'greater level of retail investment in capital markets.'
 
no change to the 41% exit tax and not even a mention of deemed disposal
The written answer directly addresses both of those points.

Recommendations 22 and 23 of the Fund Review Report include consideration of the removal of the eight-year deemed disposal requirement for Irish domiciled funds and life products and alignment of tax rates across different investment choices.
 
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