Preliminary tax for investment gains - form 11

[Innisfree]

I am ROS registered and filed a form 11 recently for gains made due to ETF disposals in 2023. I also declared some EU deposit interest.

For this current year (2024) I also disposed of some ETFs in January, and am earning EU deposit interest monthly.

My question is: do I need to pay the preliminary tax on these gains/interest by Oct 31st this year?
Or is preliminary tax mainly/only applicable to self-employed trading income?

Thanks a lot.

 

[Brendan Burgess]

Preliminary tax applies to all your income - so yes, the deposit interest is subject to it.

There is a separate "preliminary tax" regime for Capital Gains.

Disposals between 1 January and 30 November : pay by 15 December
Disposals in December : pay by 31 January of following year

Do the return on Form 11 the year after the gains.

Note, you pay the full liability not the 90% allowed for Income Tax.

 

[Innisfree]

Thank you - that's very helpful info.

I'm assuming that the Capital Gains regime here applies only to things that are taxed in that way. So ETF gains (which fall under offshore funds) probably would still be under the Oct 31st date?

 

[T McGibney]

Preliminary tax applies to all your income - so yes, the deposit interest is subject to it.

Hi Brendan

In the case of deposit interest, doesn't the deduction at source of DIRT make preliminary tax irrelevant?

 

[Innisfree]

Hi Brendan

In the case of deposit interest, doesn't the deduction at source of DIRT make preliminary tax irrelevant?

In my case, this was EU deposit interest where the DIRT was not deducted at source.

 

[Brendan Burgess]

So ETF gains (which fall under offshore funds) probably would still be under the Oct 31st date?

Sorry, I assumed it was a bad ETF which would be treated like a share.

I have completely lost track of how ETFs are taxed.

Brendan

 

[jpd]

Remember your preliminary tax due in Oct 2024 can be based on either
1. 90% of the tax due for the year 2024 - obviously this will be an estimate. but by end Oct you should have a good idea
2. 100% of tax due/paid the previous year ie 2023
3. 105% of the tax due/paid the tax year preceding the immediately previous tax year ie 2022, if using direct debit

You can choose whichever you prefer - the balance is due by Oct 31st 2025

 

[Innisfree]

Thanks folks.
In my case it's likely that the 90% of the current year is going to be more accurate, so will go with that, and finish the return early in the new year.

 

[jpd]

Accuracy has nothing to do with it - you can select the payment that optimises your cash flow, not the Revenue's cash flow

I have had years where I paid 100% of previous year's tax, although I had a large Exit Tax payment due - I paid it the following October. Then I estimated my tax due for the year and paid 90% of that - no point in paying money until it is due