Tax Code

Thursday, 16 October 2025

Questions (196, 204)

Paul McAuliffe

Question:

196. Deputy Paul McAuliffe asked the Minister for Finance his plans to amend the deemed disposal rule; and if he will make a statement on the matter. [56147/25]

View answer

204. Deputy Catherine Ardagh asked the Minister for Finance if he will address a query relating to deemed disposal (details supplied) and Budget 2026; and if he will make a statement on the matter. [56401/25]

View answer

Written answers

Minister for Finance

I propose to take Questions Nos. 196 and 204 together.

The Deputies' questions relate to the deemed disposal rules. These rules apply to investments in Irish domiciled investment funds and life assurance products, as well as equivalent offshore funds and certain foreign life assurance products. For Irish domiciled investment funds and life assurance products, the gross roll up regime applies, and taxation occurs upon the occurrence of a chargeable event, including deemed disposal. Under the deemed disposal rules, and regardless of whether a disposal in fact occurs, tax is levied eight years after an investment is made, and every subsequent eight years. The tax is levied on any gain in the value of the investment from the date of acquisition to the date of the deemed disposal. On the ultimate disposal of the investment, any tax paid as a result of a deemed disposal is allowed as a credit against the final tax liability. Deemed disposal applies in the gross roll up regime, but also within the regime applying to equivalent offshore funds and certain foreign life assurance policies. Deemed disposal was introduced as an anti-avoidance measure.

As the Deputies may be aware, the final report of the Funds Review, ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’ was published in October 2024 and included recommendations to support and encourage retail investment, including the removal of deemed disposal. A focus on retail investment is also a key aspect of the European Union Savings and Investment Union.

I am committed to taking the necessary action to support retail investment in Ireland. Recognising the complexities of the current system, my officials are developing a roadmap for the taxation of retail investment, which will set out the intended approach to simplify and adapt the tax framework to encourage retail investment in future Finance Bills. The roadmap will also take account of developments at EU level in respect of the Savings and Investments Union and is expected to be published by early 2026.

While work on the roadmap is underway, I have taken action in Budget 2026, announcing changes to the relevant applicable tax rates. Finance Bill 2025 will provide for a reduction in the rate of Investment Undertaking Tax (IUT), Life Assurance Exit Tax (LAET) and the rate of tax applicable to investments in equivalent offshore funds and certain foreign life assurance policies from 41% to 38% from 1 January 2026.

Question No. 197 answered with Question No. 194.