Dáil Éireann Debate, Thursday - 19 February 2026
270. Deputy Pádraig O'Sullivan asked the Tánaiste and Minister for Finance if he will consider addressing the deemed disposal issue relating to exchange-traded funds in budget 2027; and if he will make a statement on the matter. [13958/26]
View answerDeemed disposal is an anti-avoidance measure that applies to investments in Irish domiciled and equivalent offshore investment funds, including Exchange Traded Funds (ETFs).
Where deemed disposal is applicable, 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 reduction from 41% to 38% in the taxation rate that applies to Irish and equivalent offshore funds that was announced in Budget 2026, is an important first step in supporting retail investment. This change applies to ETFs that are taxed under these regimes.
The next step in the work underway to encourage retail investment, is the publication of a roadmap for the taxation of retail investment as announced in Budget 2026. The roadmap will set out an approach to simplify and adapt the tax framework to further support retail investment, while retaining necessary and important anti-avoidance protections in a proportionate manner. Work is underway on this roadmap, taking into account the relevant recommendations of the Funds Review, as well as the European Commission’s recommendation on Savings and Investment Accounts, published last year.
