Preliminary Tax of Deemed Disposal of ETF

[3CC]

HI All,

I purchased a number of ETFs in 2013 and therefore I will have a deemed disposal in 2021 of ~€40k. Thanks to the other threads here on AAM, I have figured out how to declare this in my 2021 form 11 which I will submit by October 2022.

I am a normal PAYE worker but I have been submitted a form 11 each year since 2013 only because I have made ETF purchases in most years and wished to declare their purchase each year. I have never had any additional tax liabiity when I fill out my form 11 as my tax is already deducted by my employer under PAYE.

My only question is - do I need to pay preliminary tax in October 2020 in respect of the deemed disposal of €40k in 2020?

Many Thanks,
3CC

 

[jpd]

In my view No, as you can pay the lower of the following so the second option is probably the lowest and you will pay that through PAYE

From the Revenue site

You must make sure that you do not under pay your preliminary tax, or you may be charged interest. The amount of preliminary tax for a year must be equal to, or more than, the lowest amount of the following:

• 90% of the tax due for that tax year
• 100% of the tax due for the immediately previous tax year
• 105% of the tax due for the tax year preceding the immediately previous tax year (often called the ‘pre-preceding year’). This option only applies where you pay by direct debit. It does not apply if the tax due for the pre-preceding year was nil.

 

[3CC]

Thanks jpd - I was hoping that would be the case.

I will have another deemed disposal in 2022 of ~€10k. Unfortunately, option 2 (above) will not be a good choice for me at that time so I will just have to pay 90% of the tax arising due to the 2022 deemed disposal.

Thanks for your rely.