Should Askaboutmoney make a submission on the SIA roadmap?

D

Duke of Marmalade

Registered User
Messages
5,645
I see they intend to base the 1%(?) tax on the average of daily NAVs :eek:
The Swedes use (1st Jan value + 1st Apr value + 1st Jul value + 1st Oct value + Deposits made in the year) / 4
The Deposits in the year piece is, I presume, to prevent gaming the 4 valuation dates.

@Brendan Burgess it is clear that they are still open to suggestions on the numbers at least. Should AAM make a submission? We could throw in the above NAV point to show out good intentions.
I suggest that we should propose the Max annual contribution as being similar to the UK equity ISA amount and the tax free threshold as being similar to the Swedish ISK, though actually that isn't a very big number. Maybe we should suggest 5 times the annual max contribution. We might have a view on the tax rate as well.
We might actually welcome the initiative. If these numbers applied it would be good for middle to high income rich , asset poor folk. Heck don't they vote FG?
 
Last edited:
I made a submission back in March on behalf of Savers and Investors generally.

Submission to Minister for Finance on SIAs

I have sent off my submission this morning. Thanks for all the input. I have cut and pasted it from the Word document, so the formatting here is a bit upset. But the actual Word document is well laid out. The Consumer Forum – Askaboutmoney.com 16th March 2026 Mr Simon Harris Minister for...
www.askaboutmoney.com

A lot of the proposals have been accepted:
  • No minimum holding period or minimum contribution
  • flexible withdrawals
  • No need to make a tax return
  • No tax within the fund
Other seem to be on the cards at some stage
  • get rid of exit tax
Ideas rejected

Contribution levels and fund size

As the primary objective of any new SIA is to encourage people to move their savings from deposit accounts to more productive accounts, the quickest way to achieve this would be to set a maximum contribution limit which could be achieved immediately through a one-off contribution or which could be built up over time.

If the contribution limit is set at €1,000 per month, it will take a very long time to achieve the objective of moving a significant amount of deposits into higher yielding products. On the other hand, if the maximum contribution is set at €100,000 without any time constraint , an investor could contribute that in one payment now. An investor who has €30,000 to invest could contribute that as a one-off payment, and if their finances subsequently allow, they could contribute up to a further €70,000.

In any event, a “use it or lost it” limit should be avoided. The SSIA had a maximum monthly contribution limit. If a person did not contribute the maximum one month, they could not make up the shortfall in later months. This “use it or lose it” unfairly favours wealthy investors and should be avoided.

Investors who need to withdraw money from the fund should be allowed to subsequently reinvest it when their financial circumstances allow. An investor may need to withdraw the money during a period of unemployment or for some other reason. The door should not be closed after them. They should be allowed to put back the amount they withdrew.
 
I am not sure that askaboutmoney should advocate for a an actual levels of the annual contribution and an actual ceiling.

Some of us believe in low tax and low government expenditure while others believe in high tax and high government expenditure.

Our focus in the submission was the structure of the model.
 
Brendan Burgess said:
Where are you getting that clarity from?
Click to expand...
I am probably reading too much into the below sentence. I wouldn't have expected an explicit consultation. Maybe leaving out numbers is Budget protocol or maybe they are still tossing around a few thoughts.
Therefore, this document should be taken as indicative of areas for consideration, rather than a Roadmap of specific commitments.
Click to expand...
 
I would not read that as an invitation to make a further submission.

But that should not stop anyone making a submission. I just don't think Askaboutmoney should do one on the rates?

I have said elsewhere that these proposals are not in themselves right wing or left wing. A left wing government could lower the ceiling and raise the tax on the amount above the ceiling. A right wing government could have very high ceilings.
 
Duke of Marmalade said:
Maybe leaving out numbers is Budget protocol . . .
Click to expand...
I think this is at least part of it. Dáil Éireann expects announcements about the imposition of tax to be made to it either ahead of, or at least contemporaeously with, any press release, etc. The tax can't be imposed with their consent and, even though the government has a solid majority and that consent will be given, they like the constitutional proprieties to be respected. My guess is that they already know what rate they will impose the tax at, and what the various limits and thresholds will be, but it would be a step too far to announce all that in a press release more than 6 weeks before Budget Day.

That's probably also part of the reason for the "indicative of areas for consideration" language in the Roadmap announcement. "We're not saying this definitely will be the tax structure for the SIAs; we're just . . . thinking out loud."

There's enough in the Roadmap for the providers to at least start designing systems for administering the SIAs. My guess it that that's a large part of the reason for saying anything at all now, rather than just keeping the whole thing for the Budget.

All of which would suggest that they might not be terribly interested in receiving submissions at this point.
 
Zenith63 said:
What is the issue with the daily NAVs approach
Click to expand...
I suppose you are right. The Swedish system is open to criticism. The dependence on 4 dates will be favourable some of the time and some of the time not; in the latter case the smart asses in the Daily Beast will wheel out their friendly accountants/actuaries/brokers to have a lash.
And then the inclusion of Deposits to avoid gaming the dates is crude and fodder for same folk.
I guess the Swedish system is more inclusive, allowing instruments not readily amenable to daily NAVs.
 
You must log in or register to reply here.
Back
Top