Given that you have done several tax returns in Ireland and in the UK, could you please explain a little bit more how the deemed disposal tax is computed at year 16 and 24?I think it's pretty clear based on the actual figures quoted above that buying is the sensible choice over renting.
However, if I wanted to put the blinkers on and think that Robert Kiyosaki is God almighty when it comes to making financial decisions in Ireland, I'd look at his base advice that 'assets are something that put money in your pocket, whereas liabilities take money out of your pocket'.
Now, still thinking of Robert Kiyosaki as the only show in town when it comes to financial advice, I consider my house a liability. However, the need to rent is also a liability - and a much, much, much bigger liability at that, with no end-date in sight.
If one were to want to TRULY follow the Robert Kiyosaki bandwagon in Ireland, they would probably buy the house and look to avail of the, very generous, €14,000 rent-a-room scheme. If Robert himself knew the tax system here in Ireland, I'm sure he'd advise that buying is the way to go.
A lot of his advice is also based on taking on lots of 'good debt' to invest in assets. Have you approached any of the banks here in Ireland looking to take on debt to invest in the stockmarket, or anywhere else? When you do, let us know how you get on
Back to the original topic, I'm in agreement with most on the thread - no ETF is worth investing €100 a month into given the Irish tax system. I've had lots of tax returns to deal with, both in the UK and Ireland. Given how complicated they can get when you've multiple income sources, I'd need to be expecting returns far in excess of any other investment options to invest in an ETF here.
I can not because my tax returns have only involved cryptocurrency gains and income, employment and rental income, dividends, options trading income and capital gains tax.Given that you have done several tax returns in Ireland and in the UK, could you please explain a little bit more how the deemed disposal tax is computed at year 16 and 24?
I just looked up Dan Malone. He's a former accountant and currently a content creator, who partners with some online investment platforms. Bit of a conflict of interests there. He's recently been advocating for cash returns from some of the online platforms that beat traditional banks deposit interest rates. Oh, he also has affiliate partnerships with them. Hmmm, no affiliate partnerships or agencies with mortgage lenders......Given that you have done several tax returns in Ireland and in the UK, could you please explain a little bit more how the deemed disposal tax is computed at year 16 and 24?
@Corola did a brilliant job to lay out a table for that, could you confirm that it is the correct way of doing it?
Given that I will be investing in ETFs on TradeRepublic anyway, could you confirm if the tax is to be paid when filling Form 11 or 12?
Also if I earned some interest in December 2023 on Trade Republic, do I have to file my Form 11 or 12 for this year reporting that?
Where in those forms should we input those incomes?
With regards to Robert Kiyosaki many people here just dismiss him straight away without even arguing his point. Dan Malone is an Irish qualified account who is also on the same view. Just YouTube his page if you want.
Actually @Corola what do you think of this ETF: iShares Smart City Infrastructure UCITS ETF USD (Acc) ISIN IE00BKTLJC87
It has a slightly higher TER of 0.40% but the results seem decent so far, would love to have your thoughts on it.
Oh, and he has a disclaimer: "Any information I provide is purely for entertainment....."I just looked up Dan Malone. He's a former accountant and currently a content creator, who partners with some online investment platforms. Bit of a conflict of interests there. He's recently been advocating for cash returns from some of the online platforms that beat traditional banks deposit interest rates. Oh, he also has affiliate partnerships with them. Hmmm, no affiliate partnerships or agencies with mortgage lenders......
Why would you file a Form 11 if you're only investing in VWCE which is accumulating? I believe you should only do so if you plan to pay for the deemed disposal tax or you want to sell your position. Plus if you are filling Form 11 I believe it is because you're declaring over 5000 euros in gain so you're a big player then. How much are you investing on that ETF out of curiosity?I do think it's worth referring to the Irish Personal Finance flowchart that is hosted on the irishpersonalfinance subreddit - not sure if the community here agrees with that, but it seems pretty logical to me.
Worth noting that it's only the very last step in it that suggests investing in ETFs/shares/whatever.
Everything before that is more important. Max pension. Buy a house. Overpay mortgage to reduce those interest costs (which in itself is a risk free, tax free return).
I invest in ETFs, (VWCE only) although having filed my first form 11, I can definitely see why people would be wary - and that's long before I have to worry about deemed disposal. I'm hoping that this regime will be changed buy then.
You spoke about whether you are better off investing rather than overpaying a mortgage. That is totally a different discussion. It depends on what you get from your investment v. what you are paying as interest. I invested before overpaying my mortgage because my interest was so low for a while that the money was better put elsewhere.Why would you file a Form 11 if you're only investing in VWCE which is accumulating? I believe you should only do so if you plan to pay for the deemed disposal tax or you want to sell your position. Plus if you are filling Form 11 I believe it is because you're declaring over 5000 euros in gain so you're a big player then. How much are you investing on that ETF out of curiosity?
Again this thread is about investing in ETFs and the tax involved, people keep dragging mortgages into it. It is obvious to me that everyone who had an opinion on that matter has a mortgage and I don't know why they want to portray their decision as a good one. Rather than arguing with Dan Malone's opinion, people just want to critisize his profile instead. They did the same with Remi Sethi, and others.
In Reddit, there is a discussion on whether it is not better off investing rather than overpaying a mortgage. So this is not a clear-cut discussion and it is fairly subjective at the end of the day.
Well, they do. They're all recommended in the best buys on this site too.He's recently been advocating for cash returns from some of the online platforms that beat traditional banks deposit interest rates.
Why would you file a Form 11 if you're only investing in VWCE which is accumulating? I believe you should only do so if you plan to pay for the deemed disposal tax or you want to sell your position.
If the gains and dividend income (whether paid out or reinvested) on ETFs were separated, with gains taxed CGT and income taxed at your marginal rate, it would satisfy many of the problems with ETFs.If anything, the plans are more likely to lead to all savings/investment income being taxed at your marginal rate.
Interesting. I thought the Form 11 was filled when either the Exit tax or the deemed disposal tax was due?So, it's a bit unclear to me whether the obligation to notify Revenue that you purchased an Irish-domiciled ETF via Form 11 is included in section 4.1.1 of 27-04-01 or whether 27-01a-02 is applicable. I've erred on the side of caution and used Form 11 to declare the purchase of Irish domiciled ETFs.
Either way, I believe that the above means that you will have to use Form 11 to declare tax due on actual or deemed disposal.
This is one of those posts where much advice has been given but will never be taken onboard.“Mortgage etc” is not “subjective”.
If it was, carving a baseball bat from a piece of wood and bludgeoning oneself to death would also be “subjective”.
Someone is taking the ramblings of a few financial self-help shysters and applying them with all the subtlety of a baseball bat to the Irish system.
Assuming you did sell after 10 years, this is what your spreadsheet will look like for the first year of monthly purchases. If you didn't sell you would have a column at Year 16, 24, etc.
In your annual tax return you will sum up the tax in the 12 rows. You will have one of these sheets for each calendar year of purchases.
A B C D = A * (C - B) E = D * 41% F G = A * (F - B) H = G * 41% I = H - E Purchase date Nb of shares Price @ Year 0 Price @ Year 8 Gain Tax, where >0 Price @ Year 10 Gain Tax, where >0 Net tax to pay 01/01/2024 01/02/2024 01/03/2024 01/04/2024 01/05/2024 01/06/2024 01/07/2024 01/08/2024 01/09/2024 01/10/2024 01/11/2024 01/12/2024
Just to be clear, the comment around mortgage etc. being subjective was referring to the overpaying vs investing question mentioned as being on reddit. I think that is subjective, and depends on your attitude to risk. Investing has the potential to deliver greater returns, but overpaying your mortgage gives a risk-free, tax-free return. And probably greater peace of mind.“Mortgage etc” is not “subjective”.
If it was, carving a baseball bat from a piece of wood and bludgeoning oneself to death would also be “subjective”.
Someone is taking the ramblings of a few financial self-help shysters and applying them with all the subtlety of a baseball bat to the Irish system.
Thanks a lot for providing those actual numbers which are also very helpful.That's absolutely great, fair play to you for taking the time to make and share your DD spreadsheet. Helpful posts like this are a credit to this forum. That will come in very handy for me in the future and I'm sure for many others here.
I printed it and filled in random figures here now for the craic just to see how it works practically, I added some total figures just to double check my workings.
That all looks good, there's a small arithmetic error but the understanding is correct.That's absolutely great, fair play to you for taking the time to make and share your DD spreadsheet. Helpful posts like this are a credit to this forum. That will come in very handy for me in the future and I'm sure for many others here.
I printed it and filled in random figures here now for the craic just to see how it works practically, I added some total figures just to double check my workings.
A | B | C | D = A * (C - B) | E = D * 41% | F | G = A * (F - B) | H = G * 41% | I = H - E | |
Purchase date | Nb of shares | Price @ Year 0 | Price @ Year 8 | Gain | Tax, where >0 | Price @ Year 10 | Gain | Tax, where >0 | Net tax to pay |
01/01/2024 | 10 | 90 | 140 | 500 | 205 | 160 | 700 | 287 | 82 |
01/02/2024 | 10 | 95 | 130 | 350 | 143.5 | 160 | 650 | 266.5 | 123 |
01/03/2024 | 10 | 105 | 140 | 350 | 143.5 | 165 | 600 | 246 | 102.5 |
01/04/2024 | 10 | 97 | 120 | 230 | 94.3 | 160 | 630 | 258.3 | 164 |
01/05/2024 | 10 | 100 | 135 | 350 | 143.5 | 165 | 650 | 266.5 | 123 |
01/06/2024 | 10 | 95 | 135 | 400 | 164 | 160 | 650 | 266.5 | 102.5 |
01/07/2024 | 10 | 90 | 140 | 500 | 205 | 160 | 700 | 287 | 82 |
01/08/2024 | 10 | 90 | 145 | 550 | 225.5 | 175 | 850 | 348.5 | 123 |
01/09/2024 | 10 | 95 | 150 | 550 | 225.5 | 180 | 850 | 348.5 | 123 |
01/10/2024 | 10 | 100 | 150 | 500 | 205 | 190 | 900 | 369 | 164 |
01/11/2024 | 10 | 105 | 145 | 400 | 164 | 185 | 800 | 328 | 164 |
01/12/2024 | 10 | 110 | 150 | 400 | 164 | 190 | 800 | 328 | 164 |
Total | 120 | | | 5080 | 2082.8 | | 8780 | 3599.8 | 1517 |
Thanks a million for your providing this. Out of curiosity bonds that pay their interests when they mature are subject to which tax please?That all looks good, there's a small arithmetic error but the understanding is correct.
A B C D = A * (C - B) E = D * 41% F G = A * (F - B) H = G * 41% I = H - E Purchase date Nb of shares Price @ Year 0 Price @ Year 8 Gain Tax, where >0 Price @ Year 10 Gain Tax, where >0 Net tax to pay 01/01/2024 10 90 140 500 205 160 700 287 8201/02/2024 10 95 130 350 143.5 160 650 266.5 12301/03/2024 10 105 140 350 143.5 165 600 246 102.501/04/2024 10 97 120 230 94.3 160 630 258.3 16401/05/2024 10 100 135 350 143.5 165 650 266.5 12301/06/2024 10 95 135 400 164 160 650 266.5 102.501/07/2024 10 90 140 500 205 160 700 287 8201/08/2024 10 90 145 550 225.5 175 850 348.5 12301/09/2024 10 95 150 550 225.5 180 850 348.5 12301/10/2024 10 100 150 500 205 190 900 369 16401/11/2024 10 105 145 400 164 185 800 328 16401/12/2024 10 110 150 400 164 190 800 328 164Total 120 5080 2082.8 8780 3599.8 1517
Tax to pay at Year 8 deemed disposal = €2082.80
Tax to pay at Year 10 sale = €1517.00
In practice for the actual sale, I would also be deducting the broker fees incurred buying and selling those units from the final gain which reduces the tax.
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