Would distributing ETFs not be a valid option for the OP?
Where should I invest...?
- Thread starter Danais
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Brendan Burgess
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Brendan Burgess
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Possibly. But you would have to be very careful to have the right ETF. I think that most of them are subject to the other tax and not Income Tax?
Do you mean deemed disposal/exit tax versus CGT?
May I suggest to Danies the following. If considering investing in bonds and if is a reasonable time as you suggest before you need to access the money, consider 0 % coupon 5 year Irish bond ( ie paying no interest and therefore no income tax) . Now selling at about 85-86:% below par value, Par value being 100% at redemption. If you now invest you will obtain about 16% interest in 5 years which is about 3.2% Apr, way better than any current bank deposit on offer, no CGT under current Irish Tax law. Strongly suggest use DEGIRO which I use. Easy to use and safe. Not Davy, silly exorbitant fees, nor International Brokers, awful unresponsive company to deal with. Obviously if you wish to trade in stocks, ETFs etc, perhaps more gain, more risk. Hope this of use.
APR is for loans, I presume you mean CAR/CAGR?
15% over 5 years is c. 2.83% CAR.
Income from Irish-domiciled ETFs is subject to a special rate of income tax equivalent to life assurance exit tax (35% from 2027). You can set your tax credits against it but you don't use up your 20% income tax band so they don't meet the requirements.
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The 0% coupon 18-Oct 2031 bond is currently trading at 85.63
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The capital gain will be 14.37.
That is 16.78% return over five years, free of CGT.
Nearretiree
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When looking at any bond the number to know is the yield to maturity. It's about 3% on the Irish 5 year zero coupon.
It's about 4.3% on the french 5 year bond
It's about 4.3% on the french 5 year bond
Interesting & good to know. I had assumed that the dividends they distributed were ‘income’.
I use IBKR for this same strategy. €1 fee to open & €1 fee at maturity.
NotMyRealName
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I'm currently working on adding the Irish zero coupon to my portfolio as a bit of diversification. My most recent research shows, As of November 14, 2026, France’s 5-year government bond yields roughly 4.32% gross compared to 3.22% for Ireland’s 5-year bond, a spread of about 110 basis points (1.10%). However, for an Irish tax resident, the Irish 0% Treasury Bond 2031 typically delivers a higher net return because its capital gain is completely tax-free.
Is CAR and AER the same? Maybe jasperina meant AER but wrote APR in error.