Roadmap for the SIA - do not discuss other issues

[TomEdison]

Are SIA investments likely to pay out dividends rather than just reinvesting them?

I expect they'll be set up to operate both ways, and accountholders can simply choose whichever way suits them.

Although if dividends are paid out rather than being reinvested then maybe they are assessable for income tax?

Not as I understand it. The dividend is income for the investor whether or not it is paid out; similarly any gains realised are the gains of the investor whether or not they are paid out. But because they are earned within an SIA they are not subject to income tax/CGT in the ordinary way; just to the 1% levy (if the account balance exceeds €50k).

 

[Itchy]

Either way, according to what I've read no taxes other than the 1% on the balance over €50K apply to the SIA.

Dividends will still be subject to foreign withholding and estate tax etc. If foreign withholding accrues in a tax free account, I would think that you would not be able to write it off against your income and thus lose the credit, if any.

 

[mmclo]

Is the suggestion also that set up a particular way an SIA may be a tax-efficient way of drawing an income, even over the longer term, would have to be a lot and be drawn on a lot, but could be a good bridging strategy to state pension, and I think people use ISAs this way in the UK

 

[ClubMan]

Is the suggestion also that set up a particular way an SIA may be a tax-efficient way of drawing an income, even over the longer term

What sort of scenario do you have in mind?

 

[mmclo]

Find it hard to come up with a simple one, but the criteria would have to be above the 50k and drawing every year. Would take a while to get there.

If somebody got to 120 over say 8/9 years and drew down 20k or 30k over 6 maybe, obviously no tax in the later years but higher in the earlier.

An existing savings account or pre SIA investments would have a different profile with CGT and exit tax in the drawdown so probably needs a spreadsheet

 

[ashambles]

Sunday Times 11/10/26 has an article this week, says limits seen as lower than the industry had been led to believe. I'd guess Trading212 stated interest in setting up an Irish SIA account would have been assuming higher limits.

Worryingly...
"The low tax free threshold has wealth managers weighing their options... only the low-cost online platforms such as Revolut and Degiro are expected to offer direct investments outside a fund structure"

I think PRB's are the closest existing model to the proposed SIA for financial advisors. And speaking just about the Aviva version, the self directed part (share/ETF/etc) a clunky add-on to the main pension.

You can buy shares and ETFs with your Aviva PRB- but 1990's style you need to phone a broker in Cantor-Fitz. It's not suitable as a solution for people hoping to spend a few hundred euro buying ETFs. But it's the only realistic quick route to these wealth managers offering a funds + equities platform. So I'd agree with the article that in reality the wealth managers will not be providing direct investments outside of funds.

We're heavily relying on someone like DeGiro/Trading212 to provide a useful account without prohibitive fees.