I meant if your 3 x 12 k savings of 36k was actually worth double at the end of year 3, so 72k, what happens then? Even if you don’t sell your fund. But you do sell it say in year 5 bad it’s actually worth 20 K.
Special Investment Accounts limits announced in Budget
- Thread starter Connard
- Start date
The tax is 1% on the value over €50k.
So on 100k the tax is €500.
Five years means €2,500.
Your example is pretty arbitary and unlikely to happen. You pay tax on the fund value above 50k. The value is calculated on a daily basis. So, your fund value would have to spike from <50k to 72k early on in the 4th year and stay at that level for the whole year. You then pay tax of ~200 euro in year 4. Then in year 5, it would have to collapse in value from 72k to 20k and stay at that level for the whole year. It is technically possible but not very likely. If you want to avoid that just sell enough to keep the account below 50k when that happens.
You could also just invest in ETFs that cover a wide range of companies (like an S&P500 ETF or all world ETF) that are less volatile and suffer from less extreme highs and lows.
Well lads I’m very impressed with this explaination of this product
www.ccpc.ie
It’s laid out in clear and simple language. The font is nice. Really easy to read and put together well. Well done the CCPC.
(I found it via google AI because of a testing idea on a different thread)
What is Ireland's new Investment Account
Learn how Ireland's proposed Investment Account could work, who may be eligible, how tax may be applied and what details are still to be confirmed.
www.ccpc.ie
It’s laid out in clear and simple language. The font is nice. Really easy to read and put together well. Well done the CCPC.
(I found it via google AI because of a testing idea on a different thread)
Duke of Marmalade
Registered User
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Two possible versions.
1). Max(0, Daily NAV - €50k), or
2). Daily Max(0, NAV - €50k)
e.g. €60k Day 1 and €40k Day 2. (1) would give 0. (2) would give €10k
The CCPC says it is version (1)
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Setforlife
Registered User
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Irish times reports that it’s understood first 6 months of account will allow 12k deposit and after that it per calendar year. I.e 12k allowed in 2027 even though scheme only starts in July.
If people are using this a/c for money they need in the next 5 years, they'd want to be very careful about what they invest in! These accounts really should be seen as 'self insurance', a way to build wealth / financial resilience.
That's not my understanding at all. It's about long term investing, not saving for events or things. We need to stop calling it saving/savings, the difference is nicely explained here :
What's the difference between saving and investing
Learn the difference between saving and investing, compare risks and returns, and find out which option may suit your financial goals.
www.ccpc.ie
So for a car, wedding or house deposit this new product is not suitable. Because you'd only be saving a short time for those. Maybe you could use it as a 20 year investment to have fund for children's education.
so you are the one to blame for this. i detest this being associated with that clown
What shouldn't it be associated with him? He took an EU plan and failed to implement all the recommendations, then looked at what Sweden and the UK had done, and mashed then together in an illogical way.
I agree with you, and I’m very angry on a personal level he didn’t just adopt the Swedish model which is far more logical, but ultimately the €12k cap is not going to impact 95%(+?) people.
This is going to be looked back on as a very positive moment imo. Possibly the most significant positive budget change in a very long time. If ‘SimonSaver’ catches on, he’s going to be very happy and a lot of credit will accrue to him for many many years to come.
I’d argue it was a layup given how bad our base is for retail investing. But he’s actually done it, nobody else did. (I know timing and EU push helped him. But history forgets those details).
I think you are being reductionist and rationalising to absolutes. Yes there are differences between saving and investing but in reality they are the same activity. They exist on a spectrum. This is a function of your investment goals, risk appetite, timeline, desired level of return etc. Once you determine all those factors, you invest in a product.
The point about the SIA, is that the return from that product will be tax and admin free. This initiative is fantastic and has a real possibility of building wealth in parts of our society that otherwise would take a lifetime.
Wolframius
Frequent Poster
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I prefer Protocol's definition of savings in the previous page than the CCPC one.
Don't worry. There will be plenty of people investing in these who have no concept of risk who will lose €100 and will curse the day they were ever hoodwinked into a SimonSaver.
Savings are expenditure foregone. Investing is doing something with savings to provide a return, rather than keeping it under the mattress. Putting savings on deposit is an investment (not a good one though).
I don’t think this is borne out in other countries who have similar models. They’re generally a resounding success.
Irish people aren’t great on financial literacy, but I don’t think we’re that different.
I’m predicting a slam dunk success with grumblings coming from the minority (like me) who want to be able to put more in.
That's not a helpful definition though since you can't invest in deposits in the PIA.