Shane Moynihan
Question:162. Deputy Shane Moynihan asked the Tánaiste and Minister for Finance whether consideration will be given to reform of the deemed disposal rule and exit tax on investment funds. [67324/25]
View answerTuesday, 2 December 2025
Questions (162)
Written answers
The Deputy has asked about reform of exit tax on investment funds and deemed disposal.
Deemed disposal is an anti-avoidance measure that applies to investments in Irish domiciled investment funds and life assurance products, as well as equivalent offshore funds and certain foreign life assurance products. Under the deemed disposal rule, tax is levied eight years after an investment is made, and every subsequent eight years, regardless of whether or not a disposal has in fact occurred. 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 is allowed as a credit against the final tax liability. The purpose of deemed disposal is to prevent the indefinite roll-up of income and gains and the associated loss of tax to the Exchequer.
The Deputy maybe aware that Finance Bill 2025 provides for a reduction in the taxation rate that applies to Irish and equivalent offshore funds, and Irish and certain foreign life assurance products, from 41% to 38%, intended as an important first step in supporting retail investment in Ireland.
However, I am conscious of the need for further adaptation of the existing complex system which applies to the taxation of investments, and I hope that further progress can be made across coming budgets to address some of the existing obstacles to greater retail investment. Work is continuing on the roadmap for retail investment announced in Budget 2026. This roadmap will be published in early 2026 and will set out an approach to simplify and adapt the tax framework to further support retail investment. This roadmap will facilitate due consideration of the Funds Sector 2030 Report, which made recommendations in relation to deemed disposal. It will also take into account the European Commission’s recommendation on Savings and Investment Accounts.