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Revenue briefing on ETF taxation

  • 01-09-2021 6:59pm
    #1
    Registered Users Posts: 695 ✭✭✭ Viscount Aggro


    Check the Revenue website today 01/09/21.

    E briefing.

    Non-Ucits Etfs to be taxed same as Ucits, from Jan 2022.

    Meaning, they are no longer taxed like shares. No offsetting losses, no CGT allowance , gains taxed at full 41%, and 8 year deemed disposal rule.

    Applies to previously held Ucits funds also.

    Ouch, this is going to **** a lot of people.



«1

Comments

  • Registered Users Posts: 3,960 ✭✭✭ Diarmuid


    This is the document you are referring to ? https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-27/27-01a-03.pdf

    I think it will take a few readings and re-readings. This postscript I think is the kicker

    [quote]1 Prior guidance confirmed that investments in ETFs domiciled in the USA, the EEA or in an OECD member state (other than the USA) with which Ireland has a double taxation treaty, follows precisely the treatment that would apply to share investments generally. That confirmation does not apply to such investments with effect from 1 January 2022.[/quote]



  • Registered Users Posts: 14,449 ✭✭✭✭ Vicxas


    Can someone explain this to me, our company gives us shares through an American company. They tax us 52% of the shares released before releasing it to us.


    What does that mean for my shares going forward?



  • Registered Users Posts: 3,054 ✭✭✭ Static M.e.


    @Vicxas Probably nothing as the change above is in relation to ETFs only and you are talking about Shares (single stock only), unless I have missed something



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  • Registered Users Posts: 513 ✭✭✭ DataDude


    Thanks for the heads up on this. Mind-blowingly stupid. Forcing retail investors away from diversified ETFs and most likely into individual stocks or actively managed investment trusts with higher fees. You couldn't make it up...

    I wrote to a couple of TDs on this a few years back. Any of the responses I got were framed as if I was some overseas investor/fund trying to dodge taxes..."There is not currently an appetite within government to provide further favorable tax treatment of investment funds" 😫



  • Registered Users Posts: 16,440 ✭✭✭✭ cnocbui


    Emigrate, it's the only solution.



  • Registered Users Posts: 695 ✭✭✭ Viscount Aggro


    The right advice...

    this is a socialist country, investing for yourself is discouraged and to punished.

    I am still investing in UCITS etfs, then i will emigrate and sell when I need to.

    Vanguard and iShares dont even bother marketing ETFS in Ireland.



  • Registered Users Posts: 5,887 ✭✭✭ handlemaster


    Crazy . Stuff the government want everyone to be dependent upon the old age pension when they retire. I dont get this policy of capital gains every 8 years. Why save at all ? Many thats the game encourage consumers spending and pull taxes from that in the short term.



  • Registered Users Posts: 695 ✭✭✭ Viscount Aggro


    The Man wants you working, paying tax, consuming....

    until you reach retirement age.



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  • Registered Users Posts: 3,564 ✭✭✭ One More Toy


    All I can say is, ****



  • Registered Users Posts: 16,440 ✭✭✭✭ cnocbui


    Revenue don't wan't people to either save - DIRT - or to invest. If you have money to invest left over after living costs, they consider it as a professional sleight as it means they have messed up in not extracting enough. Seriously, the government wants you to consume and spend every single cent, apart from what they skim off.

    The national debt per citizen in NZ is €25,299. In Ireland, it's €42,327. Both are Island economies with similar sized populations. NZ doesn't have the MNC advantage Ireland has, and yet they don't have death duties, they don't have DIRT, they don't have CGT and their version of vat is 15%. Fascinating.

    We all know Greece is an economic basket case. Their national debt per citizen is €37,139.

    The level of national debt per person in this country terrifies me; It's €90,346 per person in employment, given those number 2,250,500. Of course some of those employed people pay little or no tax, so it's even worse. Coupled with the Irish governments decades long MNC cargo cult, I can't see corporation taxation mitigating this in any way.

    There is also the oncoming express train of CO2 related taxes rapidly inbound.

    This move on ETFs is all part of the picture, which I personally believe will probably lead to deposit haircuts.



  • Registered Users Posts: 3,564 ✭✭✭ One More Toy


    It's utter bull. There may not even be a state pension when I get to that age. When the US etfs were banned I moved into riskier stocks in the s&p, feel forced to do so



  • Registered Users Posts: 175 ✭✭ Jambonjunior


    Why do they do this? Do they offer a logic for it? Why are we one of the only countries that tries to limit investment?



  • Registered Users Posts: 16,440 ✭✭✭✭ cnocbui


    As someone said earlier, it's a socialist country, but weirdly, one that worships large corporations.



  • Registered Users Posts: 2,991 ✭✭✭ Taylor365


    Question as old as time.


    They want all the foreign investment they can get, but god forbid the locals want a slice!


    My suggestion, move to Fermanagh! Tax free stocks and shares ISA + all the lakes you'd need!


    That is until the unification of Ireland in 2024...



  • Registered Users Posts: 480 ✭✭ FernandoTorres


    Surely they have to come out and justify why they are treating ETFs differently here from a tax perspective than pretty much every other OECD country? Is that asking too much!? I just really don't get why they go so far out of their way to prevent anyone investing in anything other than property. The whole system is a joke. Even the CGT exemption of E1,270 is still linked to the punt FFS and hasn't been indexed since. If that was the case in the US, UK, Aus etc there'd be uproar.



  • Registered Users Posts: 16,440 ✭✭✭✭ cnocbui


    They can't justify VRT, or DIRT or levies on all forms of insurance and not allowing for inflation when calculating capital gains or still having the 'temporary' USC, 11 years after it was introduced, so why should they have to now? Wake up and leave.



  • Registered Users Posts: 484 ✭✭ B2021M


    Extraordinary. At a time when they should be discouraging investment in property they do this....



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  • Registered Users Posts: 480 ✭✭ FernandoTorres


    I already did! I've lived in Australia for the last 8 years and have benefited hugely from investing but am moving home next year and already dreading dealing with the shambles of a system they've created. Here we have a standard system where ETFs are treated like shares (what a novel concept!) and capital gains are charged at your marginal tax rate with a 50% discount if you held the asset for 12 months or more. Losses can be carried indefinitely.

    I used to think in Ireland they just didn't pay any attention to it as most people couldn't care less about investing but now it seems like it's a deliberate strategy and I just don't get it. I've never heard of any other country that has this deemed disposal rubbish.



  • Registered Users Posts: 16,440 ✭✭✭✭ cnocbui


    I'm an Australian who has been living in Ireland for too long and can't leave soon enough. I think you will be wondering what the hell you were thinking, not long after you return.



  • Registered Users Posts: 91 ✭✭ geo88


    what alternatives remain/are still attractive in light of this?



  • Registered Users Posts: 401 ✭✭ Blud


    Wait till you find out the AU rules on deemed disposal when you break tax residence there...



  • Registered Users Posts: 480 ✭✭ FernandoTorres


    I'm already aware of that and have planned accordingly. A deemed disposal on breaking residency makes some sense and is common enough. A deemed disposal for just continuing to stay invested seems ridiculous and can cause major headaches due to timing.



  • Registered Users Posts: 244 ✭✭ techman1


    How do you know they apply to already owned US domiciled etfs ?

    What happens on January 1 if for example you still hold a US etf and have held it for 10 years before January 1 surely the deemed disposal clock only starts on January 1 because thats when they changed their guidance ?



  • Registered Users Posts: 2,092 ✭✭✭ Yellow_Fern


    Possibly UK investment Trust. Some say that they will be withdrawn from sale due to KIID rules in a few years. So the other option is to find conglomerate stocks, ideally with with no dividends.



  • Registered Users Posts: 244 ✭✭ techman1


    Any new information on this? Nobody seems to know anything for definite, what now distinguishes a CGT taxed ETF from a deemed disposal ETF. What are you to do with US domiciled ETFs that are now taxed under CGT but there is no clear rule after January 2022.



  • Registered Users Posts: 257 ✭✭ notsocutehoor


    I think you have the right idea Dude, write to your local TD's and the Finance & Public Expenditure Ministers, setting out in reasonable detail the cons of how ETFs and UCITS are dealt with from a tax point of view and particularly the risk associated with forcing less experienced investors down the riskier route of individual stocks. Every TD in every constituency needs to be targeted though to make a campaign effective. The rules are only going to change from political pressure



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