As the rate increased they kept the same +3% until they both were raised to 41%, so the equivalent now would be 36%.
But that's irrelevant - the report already recommends 33%, why propose a higher rate?
As the rate increased they kept the same +3% until they both were raised to 41%, so the equivalent now would be 36%.There used be 20% CGT tax and 23% tax on funds to account for rolled up dividends.
If we assume they didn't pull the 23% figure out of the air, then a proportional figure based on 33% CGT would be, if I've calculated correctly, 38%.
This part doesn't make any allowance for the tax that's already been paid.Otherwise, the cost basis would be the value of the ETF holding at the last deemed disposal.
I would expect al the tax on the deemed disposal would be offset against the CGT due calculated from the original purchase cost and the disposal value
They already do go with that idea for life assurance investments with deemed exit tax already paid. I'm not well up on the subtleties of EFT taxation, but it's likely they're already operating on that basisBut I would delighted if Revenue go with your idea and not mine!
Enterprise minister Peter Burke has said the government is examining how other jurisdictions handle taxation of exchange traded fund (ETF) returns and that there is a huge amount of competition for investment in the area.
Speaking to reporters on Thursday, Burke said he’d been “very much clear” in his budget submission that the government must look at the “value proposition” for investors in other jurisdictions.
“I think we need to make significant improvements in this budget because we need investment to come into our country,” he said.
The minister believed we need to remain competitive as an economy, relating to all elements of the tax system.
[..]
For funds, gains and dividends (paid out or accumulated) are both taxed at 41%, somewhat of an average rate between the two.
Only for higher rate taxpayers. It would be less favourable for lower rate. You can’t reconcile this without more complexity.Yes, the proposed 33% rate would make an accumulating fund be taxed more favourably than the identical basket of shares
Claim the tax differential is there to influence behaviour. If it's a life assurance fund, it's supporting Irish jobs. If it's an ETF, it's part of the governments strategy to encourage them to be domiciled in the country and also allow citizens to benefit. Shares get higher tax to steer investors towards diversified investments. All it takes is a bit of spin.Not sure how to reconcile that.
Isn't that the case as things stand? ETF acquired, held for less than 8 years, and then sold => no DD, just exit tax?a situation where no DD is levied (if held under 8 years).
Poor phrasing on my part. What I meant by it is a situation whereby existing ETFs held for under 8 years would switch over to the CGT regime (thus incurring no DD). I don't think this is likely.Isn't that the case as things stand? ETF acquired, held for less than 8 years, and then sold => no DD, just exit tax?
One of the fund report recommendations is to get rid of old basis life policies. They're not going to want to introduce another new/old basis were some life policies and ETFs are on one tax regime and some on another.Being realistic however, the easiest thing for Revenue to do is to draw a line in the sand. ETFs bought after X date are subject to CGT, any bought before then follow the rules that existed at the time.
Seems a bit odd, telling people their investments must be closed out. There's plenty of old basis policies that cannot be replaced with a similar gross roll up product.Old Basis Business regime should be wound down, following detailed consultation to mitigate
risks for policyholders.
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