Dáil Éireann Debate, Tuesday - 16 December 2025
356. Deputy Brian Stanley asked the Tánaiste and Minister for Finance when he intends to abolish the deemed disposal regime applicable to investment funds; the timeline for implementing the recommendations of the Funds Sector 2030 Report in this regard; and if he will make a statement on the matter. [71372/25]
View answer357. Deputy Brian Stanley asked the Tánaiste and Minister for Finance if he has assessed the impact of the deemed disposal regime on ordinary retail investors and pension savers; if he accepts that the requirement to pay tax on unrealised gains penalises long term saving and undermines financial planning for households; the way in which the recommendations of the Funds Sector 2030 Report will address these concerns; and if he will make a statement on the matter. [71373/25]
View answer358. Deputy Brian Stanley asked the Tánaiste and Minister for Finance if he has examined the way in which the deemed disposal regime places Ireland at a disadvantage compared to other EU member states where investors are not taxed on unrealised gains; the way in which the Funds Sector 2030 Report proposes to align Ireland's framework with international best practice; and if he will make a statement on the matter. [71374/25]
View answerI propose to take Questions Nos. 356, 357 and 358 together.
The Deputy has asked about 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. Under the Irish system pension savings grow tax free until drawdown. Therefore, deemed disposal does not apply to pension funds and products.
Across Member States there are many different approaches to the taxation of investments, including in some instances a savings and investment account with its own specific tax treatment. This range of approaches was considered by the European Commission in developing their Recommendation on savings and investment accounts in September 2025. The recommendation provides a European blueprint for savings and investment accounts, and its publication was welcomed by Ireland.
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.
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. To this end Budget 2026 included the announcement of the publication of a roadmap for retail investment in early 2026. Work is underway on this roadmap, which 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 and the European Commission’s recommendation on Savings and Investment Accounts.
