The Swedish equivalent of an ISA as a model for Ireland?

Banquo said:
Presumably in times of economic stress the 1% will be an easy target for the government to increase ...
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I don't think so. Increasing the tax when the market is down would not just be very bad for the investor, it would also be bad for future governmet returns. It would be killing the golden goose.
 
AJAM said:
I don't think so. Increasing the tax when the market is down would not just be very bad for the investor, it would also be bad for future governmet returns. It would be killing the golden goose
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I agree in principle but needs must and if the alternative is reducing pensions / benefits I know where my money is so to speak. They reduced the tax relief on pensions and increased CGT rates in the last recession if memory serves.
 
faketales said:
Just because it’s the Swedish system doesn’t mean they will match the Tax Free or percentage tax element.

Impossible to judge the system until we know those two and costs.
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Agreed. I guess the argument against having a limit on what can go in is (a) it runs counter to the objective to move large sums of money out of deposit accounts and (b) actually probably moves large sums into the tax net if enough goes across. But I wouldn’t be surprised if the political pressure results in annual and total caps.
Banquo said:
I agree in principle but needs must and if the alternative is reducing pensions / benefits I know where my money is so to speak. They reduced the tax relief on pensions and increased CGT rates in the last recession if memory serves.
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They also raided pension funds one year.
 
How depressing, so it seems to be a pretty bad scheme based on what we know. Honestly why can't they just get rid of deemed disposal and reduced etf CGT to 33%. That is best for long term investors, which is surely what you want to incentivise. I'm dissapointed a better scheme couldn't have been envisaged.

So demoralising when our neighbours across the pound have such attractive investment rates in the UK, the fact Ireland can't even get anyways close is a kick in the teeth.

Ireland a socialists paradise!
 
Yes. If people have worked hard and accumulated assets in an environment that has not been relatively kind to wealth creation for many years they should be entitled to be able to access this account in a positive way. If there are to be annual or lifetime limits they should be large.
 
irishfinanceguy said:
How depressing, so it seems to be a pretty bad scheme based on what we know.
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Couldn't disagree more. I think it is excellent.

  • No Deemed Disposal, so you can compound your money and grow some serious wealth
  • All money/assets taxed at 1%, so you no longer care if something pays a dividend. No more avoiding dividends like the plague
  • All money/assets taxed at 1%, so you no longer care if something is an ETF or Investment Trust etc. etc. etc.
  • No taxable event on sale, so now you can move to a better invesment even if you have large capital gains (particularly useful at times like now, where you might want to sell most of your equities and invest in Energy stocks or Gold)
  • Stable predictable tax revenue for the government
  • No complicated tax filings, Easy to calculate, easy to pay, no tax avoidance, everybody pays
  • Government don't lose out on CGT if you die
  • Not to mention, completely tax free on the first ~30K
I honestly don't see how it could be better, unless your argument is, we shouldn't have to pay any tax, on anything, ever.
 
@AJAM
Are you pulling my leg?
If you run the numbers (correct me if I'm wrong) at around year 10-12 a ETF (taxed at 33% CGT with no deemed disposal) beats it and then increasingly so year by year. Therefore for long term investors this is worse than the bare minimum hope which was the 33% CGT ETF with no deemed disposal. Whats more it is likely gonna stop those changes happening. Your average investor should be investing in ETF and forgetting about it for decades, this scheme leaves you worse off than the bare minimum proposal re ETF changes

How is it excellent? 30k lifelong tax free is pocket change for people saving towards retirement
 
Yes its a good vehicle for short term trading especially if no limits on contributions and withdrawals. Would have been extremely good for the types of markets in last 5 or 6 years
 
irishfinanceguy said:
So for young people saving for retirement it's not good
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Young people saving for retirement should be using pension products with all the advantages you get there.

Young people saving short/medium term for say a house deposit would be much better with this ISK product than an a 33% CGT product.
 
@balders93 @C_Pike for those of us who have maxed out pension Avcs etc it's important to have other options

Other countries have pension schemes plus tax efficient investment schemes which many use to combine with pension to retire early etc
This scheme lacks that utility in the long term
 
irishfinanceguy said:
Other countries have pension schemes plus tax efficient investment schemes which many use to combine with pension to retire early etc
This scheme lacks that utility in the long term
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The scheme is perfect for that. The existing pension product should be used for the long term pension planning as nothing beats it.

Then, those wishing to retire early can divert savings to this scheme in the years closer to retirement to cover the gap until the age they can access their private pension.

Let's say someone diverts money to this scheme 16 years before retirement with a plan to retire 8 years before the can access their private pension. Each of the eight years before private pension access will involve withdrawing a single years contribution plus 8 years growth. If growth Iwere 6% annually, each withdrawal will have had approximately 60% growth and would be subject to approximately double the taxation that what would be incurred under the annual charge of the proposed system - even before whatever tax free allowance that exists is considered.
 
@ronaldo the pension scheme would be fine but as I said it is capped on how much you can put in with higher limits for young people. I.e. this scheme could have been an ideal alternative but sadly for the long term it isn't
 
faketales said:
What percentage of young people are maxing out the 15%-20% pension contribution?
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Exactly. I imagine that it's a miniscule proportion of the deposit funds they are targeting with this scheme that belong to young people who are already contributing the maximum to their pensions and looking to save further for retirement versus more medium term goals.
 
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