My issue is not so much that it applies, it is how it applies. I've seen different people get conflicting advise, and their own documents contradict a few bits too. Not to mention that the example in about 27-01a-02 average cost deemed disposals is not have the life companies apply it either.I’m pretty sure they are saying that the exit tax/deemed disposal regime will apply to all ETFs, regardless of domicile, from the start of next year.
I don't understand this opinion.However, and this is really important, in practical terms this does not actually change anything, they are still talking about an offshore investment only being considered a fund if it is "equivalent" to an Irish authorised unit trust etc. The reason Revenue agreed that ETFs issued by US or Canadian issuers under a unit trust arrangement were not considered funds in the first place was because they are not considered to be "equivalent" to Irish unit trust schemes, the most important factor here being that they do not offer investors the facility to redeem their units directly with the unit trust.
Therefore, in the opinion of our expert tax consultants this doesn't make any difference in practice
I think this statement needs to be read in context.“Some investment ISAs will turn an investment in quoted shares (unlikely to be an offshore fund) into a holding in an investment trust (likely to be an offshore fund)”
Thanks for bringing this to people's attention here. However if it doesn't make any difference what has the revenue e-brief actually clarified and what is changing on 1 January 2022 ?Therefore, in the opinion of our expert tax consultants this doesn't make any difference in practice. Although, of course, you still need to navigate the US Federal Estate tax on US situs assets held by non-resident foreign aliens which makes US ETFs extremely risky for many Irish investors,
I'm in the same boat and not happy about this news at all. US ETFs are distributing not accumulating - it's the same as owning shares.How can that be fair? Someone has followed the Revenue guidance and invested in a US ETF. And now the rug is pulled from under them and they need to sell the ETF and trigger a CGT liability or enter the draconian fund tax regime.
Does anyone know if there is a way to engage with Revenue to ask to explain their reasoning...Yes but what has changed ? before 1 January 2022 US domiciled etfs are treated under cgt regime and treated like shares afterwards they are treated like European etfs. But they haven't said why ? even revenue have to give a reason. They have to say why they have changed the definition and on what basis it has changed?
Prior guidance confirmed that investments in ETFs domiciled in the USA, the EEA or in an OECD member state
(other than the USA) with which Ireland has a double taxation treaty, follows precisely the treatment that
would apply to share investments generally. That confirmation does not apply to such investments with effect
from 1 January 2022
Wishful thinking but is there anyway this could mean that US ETFs purchased before 1 January 2022 would continue to stay treated as they were....(grasping at straws here)they need to sell the ETF and trigger a CGT liability or enter the draconian fund tax regime.
Sorry @Marc but the opinion of your “expert” tax consultants makes no sense to me and appears to be based on a fundamental misunderstanding of how ETFs actually work.Post in thread 'Revenue E-Brief on ETFs'
Please reread my last post