fistophobia
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Never underestimate the personal agenda and bias in such articles.
The Roadmap for Deemed Disposal
- Thread starter Brendan Burgess
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Duke of Marmalade
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I wasn't saying that at all.
I am either not explaining myself very well or you have a fixed narrative which is not for changing.
Gross Roll Up and DD developed over 20 years ago when there was no competition worth talking about for Life companies in the mass market for regular long term savings. Their main concern was to preserve the simplicity and composite taxation rate for savers. Unit Trusts never got off the ground in the way they did in the UK and ETFs either didn't exist or were extremely niche.
Latterly low cost accumulator ETFs posed a real threat to the Life policy proposition. These were shares and on the face of it facilitated the indefinite deferral of CGT that DD was meant to stamp out in the Life policy case.
I was no longer involved but I presume there was heavy and legitimate lobbying against this extremely unlevel playing field and Revenue reacted to bring ETFs in line with Life policies. They should have distinguished between distributors and accumulators but as they were as yet small players in the overall market I guess they just didn't think it worth the hassle.
Maybe if the people that the Sindo writer claims were talking about nuffin' else should have eased off the demonising of DD and instead lobbied for the UK style regime to be applied to ETFs they might have been listened to.
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Duke of Marmalade
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Very valid criticisms.
As I have said above, there should have been less demonising of DD (without addressing the anti avoidance point) and more promotion of the UK approach to taxing ETFs we would be in a better place.
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Simon Harris, responding to an Irish Times article, which was criticising the lack of deemed disposal action, has said "Maybe because the Budget isn’t until next month? Criticising the budget before it has been agreed by government, let alone announced in the Dail is a bit premature."
x.com
Still hope after all for Deemed disposal removal in budget 2027?
Simon Harris TD (@SimonHarrisTD) on X
Maybe because the Budget isn’t until next month? Criticising the budget before it has been agreed by government, let alone announced in the Dail is a bit premature.
Still hope after all for Deemed disposal removal in budget 2027?
Then why have they made a big song and dance about the roadmap document which states there will be no action taken on DD in the budget?
From a quick scroll through, a lot (the majority?) of the replies to his Instagram post are calling for deemed disposal to be removed in Budget 2027.
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confused87
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No this is just a typical Harris response to criticism and he is just giving himself time to come up with a proper answer budget day why it will not be abolished. I will eat my hat if Harris gets rid of DD. Karl Deeters response is spot on.Simon Harris, responding to an Irish Times article, which was criticising the lack of deemed disposal action, has said "Maybe because the Budget isn’t until next month? Criticising the budget before it has been agreed by government, let alone announced in the Dail is a bit premature."
Still hope after all for Deemed disposal removal in budget 2027?Simon Harris TD (@SimonHarrisTD) on X
Maybe because the Budget isn’t until next month? Criticising the budget before it has been agreed by government, let alone announced in the Dail is a bit premature.
karldeeter
@karldeeter
2h
Hit the current long term savers for as long as possible prior to bringing in your own savings scheme. Ultimate FG move
Duke of Marmalade
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No but reduction in rate Yes
Shame the replies get immediately bombarded with head cases talking about immigration etc. instead of what you’ve said.
No wonder politicians struggle to see through the ‘noise’ and end up just blocking it all out
His junior minister saying - ‘DD is from a bygone era and it will be addressed in the budget BEFORE the introduction of a PIA’.
His Roadmap explicitly stating it will absolutely not be considered in the budget as focus is on PIA
Him tweeting a teaser that it might be dealt with in the budget.
All within 14 days. Shambles
Just a slight precision: it sets out DD/exit tax policy options for consideration from Budget 2028.
It doesn't exactly say it won't be considered at all in Budget 2027.
Maybe I'm just grasping/hoping.
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We all need a bit of cope. Mine is that I can just look forward to a refund of DET when it's abolished and it's time to cash out.
Duke of Marmalade
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This is an historically low dividend yield. The market in in effect in a growth phase. The 1% yield is anticipating that growth will eventually support a more sustainable, say, 3% yield. Assuming 1% dividend yield for 30 years assumes either that the market will continue in its current super growth phase for 30 years or you will always be able to switch into the current growth stocks.
This is a great point and one I hadn’t really modelled out, thanks. Will have a look at some stage - suspect my wife not working will mean investment trusts still win out but perhaps at a certain overall balance when she starts to tip into higher rate income tax band, it may make sense to move future investments to ETFs. Oh the joys of navigating investment taxation in Ireland…
As an aside, do you think there’s anything to be said for lower dividends to be structural? Indexes dominated by tech funds who favour expansion and buybacks over dividend? Some of the big players have had tonnes of dividend capacity for some time now but just choose not to. E.g Apple has a payout ratio of just 10%-15% of FCF.
Duke of Marmalade
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That's another complication.
Though Gemini says this:
I attach your spreadsheet with the dividend yield rising from 1% to 3%. CGT still wins out comfortably. That trick with the other half is useful, I have used it myself as the Duchess has Irish and UK State pensions and we have some joint investments.
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Reduction in exit tax rate looking more likely in this Budget.
www.thejournal.ie
Asked whether the progress he is now promising on deemed disposal would constitute a reduction in the 38% rate at which it is currently charged, Harris said: “I’ll keep my powder dry on this, but I expect we’ll be able to make some progress on this in the budget.”
Harris likely to bow to pressure to tackle unpopular investment tax in upcoming budget
Deemed disposal is widely viewed as a deterrent to investment by Irish savers.
www.thejournal.ie
Asked whether the progress he is now promising on deemed disposal would constitute a reduction in the 38% rate at which it is currently charged, Harris said: “I’ll keep my powder dry on this, but I expect we’ll be able to make some progress on this in the budget.”
Duke of Marmalade
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No to abolition of DD in this budget but yes to reduction in rate. CGT + 2%
This seems fair to me (on the assumption that the CGT rate is fair), which leads me to wonder about the removal of the 1% levy/stamp duty on life assurance products. As soon as that thought entered my head, I wondered about the SimonSaver. Would a life company's SimonSaver product be subject to this 1% levy, but not one offered by a bank, stockbroker or whatever? What effect might this have on the costs and the likelihood of the scheme being a success?
Duke of Marmalade
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One of the downsides in there being a link between CGT and LAET is that it makes it less likely that the CGT regime would be put on a more favourable basis in line with other regimes. For example, in France they don't quite have indexation relief but they do slash the rate after various periods of tenure.
One would think that would have to go. One of the weird legacies of the life assurance system (maybe now corrected) is that life companies are only authorised to sell "life assurance". So their entreé into savings started off by having life cover at 15 times annual premiums (got special tax relief). then went to 105% of premium, to 101 % to 100.01% which is where I left it.
I thought that was a permanent condition of his