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Taxes & Penalties

  • 29-04-2010 3:27pm
    #1
    JohnnyCrash
    Registered Users, Registered Users 2 Posts: 978 ✭✭✭


    Howdy Peeps,first time posting on this forum so hope this is the right place to ask my questions. Invested 20k in BoI smart funds Nov 2007.Needless to say,lost quite a bit.Now its back to 15.5k and im thinking about pulling it out. My Q's are,
    1.Is there tax liable?
    2.Is there an early encashment penalty?
    3.Would it be worthwhile only partially encashing,say,leaving in 10k to recoup loss?

    All suggestions welcome.P.S. I dont dabble in investments.This was a one off with a lump sum at the time to make the most of it.


Comments

  • #2
    gizmo555
    Closed Accounts Posts: 2,948 ✭✭✭gizmo555


    (1) No, you only have a tax liability if there is a gain.

    (2) Depends on the specific terms and conditions for this fund - you would need to check your documents or get onto BoI customer service to find out.

    (3) Unfortunately for you, you bought into a heavily falling market. I've no idea what this fund is invested in, but actually a 22.5% fall is less than many investments - the ISEQ 20, for example, is down about 50% in the same timeframe.

    If you encash this investment now and buy into a new one, you will be liable for any gains the new investment yields, but won't be able to offset them against the losses in the current fund.

    You may - and I stress 'may' - be able to switch between funds within BoI and avoid this, but you would need to check with them and get written confirmation of the situation.

    As for the merits of the particular fund, as I say, I know nothing about it. A good question to ask yourself when you're in this sort of position is, if I wasn't already invested in this, knowing what I know today and disregarding previous performance, would I still buy into it? Unless the answer is "yes", you're better off out of it.


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