limits announced in Budget

Because the tax is low but the account is restricted in annual contributions, for people who have substantial savings it could make sense to use the SIA for the most speculative portion of their portfolio.

With our regular investment taxation being high, the contribution limit being relatively low at 12k - a small incentive to remove once above 50k we have the ingredients in place where you encourage high risk strategies - and if they come off then due to the tax limit people might take the money out and try again.

They talk about stopping risky investments in crypto etc. but there will be ETFs and funds with some crypto, there could be leveraged ETFs, there will be listed companies teetering on bankruptcy where the risk/reward will tempt people into gambling on them. There's a lot of risk out there that doesn't involve buying particular crypto currencies. I assume they'll allow all CBI regulated ETFs - which is the majority of EU based ETFs.
 
Can you just lob 12k in in one go when it starts, or does it NEED to be 1k per month? So much conflicting info already!
 
Last edited:
You gotta hand it to Simon. He said at the very start that he was keen on the Swedish model.
It differs from the ISK as follows:
Tax free threshold €50k versus less than €30k with the ISK - one up for Simon
Tax rate 1% versus a nerd formula giving roughly the same answer in the ISK but varying year to year - two up for Simon
The big difference is that you can only put a max of €12k per annum into the Simonsaver whereas there is no limit whatsoever for the ISK
Fingerprints of the Marxist mob being denied a really juicy bone but I still think Simon has got it right; it's a savings plan. Fair play.
 
I wonder will the 1% life assurance levy apply to the account if done through a life company? I'd imagine that would put them at a severe disadvantage to the non-life co options.
 
Duke of Marmalade said:
The big difference is that you can only put a max of €12k per annum into the Simonsaver whereas there is no limit whatsoever for the ISK
Click to expand...

I wonder if that will be increased over time. They may be concerned about massive withdrawals from the banks.

Another option would be to tax deposits.

Deposits: 1% tax (12k annual tax free)
Balance: 1% tax on highest balance during the year (50k tax free)

This protects against tax avoidance and most people won't go over the tax free 12k limit.
 
Duke of Marmalade said:
You gotta hand it to Simon. He said at the very start that he was keen on the Swedish model.
It differs from the ISK as follows:
Tax free threshold €50k versus less than €30k with the ISK - one up for Simon
Tax rate 1% versus a nerd formula giving roughly the same answer in the ISK but varying year to year - two up for Simon
The big difference is that you can only put a max of €12k per annum into the Simonsaver whereas there is no limit whatsoever for the ISK
Fingerprints of the Marxist mob being denied a really juicy bone but I still think Simon has got it right; it's a savings plan. Fair play.
Click to expand...
Tax free Threshold is a couple of hundred euro tax break from the ISK. All in all the ISK is a superior model. So yeah in the sense no other finance minister has done anything to encourage investment, Harris gets a win there but outside of that it is not in any way as good as our nearest neighbors (ISA) or the scheme he was copying(ISK).
We also don't know the fees that will be charged on top of the 1%, in Sweden they are very low i believe, will we get the same? So i wouldn't be claiming its 2 up on the ISK.
 
Last edited:
confused87 said:
Tax free Threshold is a couple of hundred euro tax break from the ISK. All in all the ISK is a superior model. So yeah in the sense no other finance minister has done anything to encourage investment, Harris gets a win there but outside of that it is not in any way as good as our nearest neighbors (ISA) or the scheme he was copying(ISK).
We also don't know the fees that will be charged on top of the 1%, in Sweden they are very low i believe, will we get the same? So i wouldn't be claiming its 2 up on the ISK.
Click to expand...
The ISK has a variable tax linked to government cost of borrowing, I wonder will that go up in current conditions.

The fees, government can only try and influence via regulatory environment, driving competition and consumer awareness and behavior to look for competitive fees. Fingers crossed. But I also think there’s enough challenger brands coming into the finance market to make it a real possibility that we get decent fees.

It has been clear for a while we’re not getting a UK ISA regime. I suspect the annual limit on this scheme is mainly to control the inflows and see where they really come from and what tax otherwise goes missing as a result. See if that settles over years.

Overall on the face of it, an investor with excess cash has a big windfall from this rolling out. It’s a positive step, even just culturally.
 
Itchy said:
Based on the indicated cost of the scheme, it seems the contributions will be pro rata?
Click to expand...
Probably more assumption based around what people have to save. Assume vast majority won’t max out even in a full year, never mind a half year?

X many accounts, average €y hundred a month I’d say is the maths in the background
 
Itchy said:
Based on the indicated cost of the scheme, it seems the contributions will be pro rata?
Click to expand...
maybe if the cost is based on DIRT forgone it is based at half the cost as they will still get 6 months of DIRT in 2027 but you can still contribute 12k in year 1 maybe?
 
You must log in or register to reply here.
Back
Top