Prisma 5 Query

O

Oscar16

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I invested €50,000 in Zuich Prisma 5 in May 2021 via a broker and I was able to withdraw €7,000 duirng 2024 (€2,000 in March & €5,000 in Dec while protecting the principle amount i.e the €50,000 and I like the fact that the gains are taxed so I don't have to deal with submitting revenue returns etc.
I have €270,000 sitting in a bank account gaining very little interest, my question is should I invest this also in Prisma 5 or other similar fund? I want my money to work for me with my main aim being to protect the principle and when the market is favourable withdraw the gain which can be used for holidays etc. I don't need access to this money for day to day living and I do have a emergency fund. I am retired, no mortgage or loans.
Also the broker I'm with charges are 1.25% and Zurich have advised that they would give me a cheaper rate of 0.80% if i dealt with them directly, which seems to make sense. Would love to hear your thoughts.
 
A question like this really needs a Money Makeover to address properly in my opinion.

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Oscar16 said:
I want my money to work for me with my main aim being to protect the principle and when the market is favourable withdraw the gain which can be used for holidays etc.
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This fund currently has 75% in equities, 12% Alternatives, 9% bonds and 4% property.

Why do you think that your principle might be protected or did you just mean something else?
 
My thinking is i let the fund build up and only withdraw when say for example there is €56,000 in the fund after tax. So take €4,000 out and leave €52,000 in the fund thereby protecting the principal €50,000. I fully understand the €52,000 could decrease but in that case I would leave money in fund until it builds up again be that in one or two years. Maybe my thinking is way too simplistic.
 
If you just bought a suitably diversified basket of good quality shares directly the taxes and charges would be much lower.
 
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ClubMan said:
If you just bought shares directly the taxes and charges would be much lower.
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The charges I understand but why would the taxes be higher with Prisma 5 compared with buying shares directly? It's not an ETF so are they not both subject to CGT?

I asked google and got back: "If the Prisma 5 fund includes foreign assets or policies, the CGT rate may be 40%".
 
CharlieMac said:
The charges I understand but why would the taxes be higher with Prisma 5 compared with buying shares directly? It's not an ETF so are they not both subject to CGT?
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Isn't Prisma subject to 41% exit tax on growth? And 8 yearly deemed disposal? And no ability to offset losses or any €1,270 annual exemption?


CGT on shares is 33% and allows losses to be offset against gains and provides an annual €1,270 exemption.
CharlieMac said:
I asked google and got back: "If the Prisma 5 fund includes foreign assets or policies, the CGT rate may be 40%".
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That's simply wrong. There's no 40% CGT rate.

Edit: correction - there is a 40% CGT rate:

Prisma 5 Query

I invested €50,000 in Zuich Prisma 5 in May 2021 via a broker and I was able to withdraw €7,000 duirng 2024 (€2,000 in March & €5,000 in Dec while protecting the principle amount i.e the €50,000 and I like the fact that the gains are taxed so I don't have to deal with submitting revenue returns...
www.askaboutmoney.com
 
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CharlieMac said:
I asked google and got back: "If the Prisma 5 fund includes foreign assets or policies, the CGT rate may be 40%".
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You shouldn't even bother reading the Google AI search results summaries, they are terrible on every subject. The correct answer is that prisma funds through a life assurance wrapper are subject to LAET which is a 41% tax on growth, along with 8 year deemed disposals.
 
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Fortune said:
You shouldn't even bother reading the Google AI search results summaries, they are terrible on every subject. The correct answer is that prisma funds through a life assurance wrapper are subject to LAET which is a 41% tax on growth, along with 7 year deemed disposals.
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Now this is awkward :) because your answer is not actually correct but the Google summary gave me the correct answer "For a standard Irish resident, investments like the Prisma 5 Zurich fund (which falls under the umbrella of investment funds, often including ETFs) are subject to a 41% tax rate on gains and any income earned, and a deemed disposal rule requires tax to be paid every eight years on unrealized gains."
 
ClubMan said:
Isn't Prisma subject to 41% exit tax on growth? And 8 yearly deemed disposal? And no ability to offset losses or any €1,270 annual exemption?
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Isn't that all going to change with the Funds Review Report recommendations on Life Assurance Exit Tax (LAET)

We don't know what it's going to be in a years time, never mind 8. It's likely to be brought into line with the 33% rate and they may also tweak the facility to offset losses and gains (on different funds) and hopefully remove deemed disposal and Government Levy at some stage.

The fund that the OP is talking about has 4 asset classes in it so losses/gains on each of those are offset within the product wrapper. If the OP pays 41% tax on a withdrawal, and the tax rate reduces, then the product provider will account for that within the product on future withdrawals/encashments.
 
Zenith63 said:
Now this is awkward :) because your answer is not actually correct
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In fairness, I was happy to interpret the 7, rather than an 8, as a typo.

But when I asked google:
"ireland how would i invest in Zurich Prisma 5 what are the taxes and costs or fees?"
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Google AI gives me a well formatted and carefully referenced summary.
I'm thinking, that looks legit, it must be right!

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CharlieMac said:
In fairness, I was happy to interpret the 7, rather than an 8, as a typo.
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Ah I was only teasing, I'm sure you're right.

Oddly when I paste your query into my Google search I get a different summary without the detail on the tax. If I paste it into Gemini (which I assume the Google Search summaries are based on) I get correct tax/deemed disposal details. Just further confirmation that the responses cannot be relied upon.
 
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