Dáil Éireann Debate, Wednesday - 20 May 2026
77. Deputy Emer Currie asked the Tánaiste and Minister for Finance if he will provide an update on the steps his Department is taking towards reform of the deemed disposal rules on ETFs; and if he will make a statement on the matter. [38166/26]
View answerThe deemed disposal rule is an anti-avoidance measure that applies to investments in Irish domiciled investment funds (including Irish domiciled Exchange Traded Funds or ‘ETFs’) and life assurance products, as well as equivalent offshore funds (including equivalent offshore ETFs) and certain foreign life assurance products.
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.
An ETF is an investment that is traded on a regulated stock exchange. There is no specific taxation regime for ETFs and typically, the domicile of the ETF determines whether it falls within the domestic funds regime (gross roll-up), the equivalent offshore regime, or the non-equivalent offshore fund regime.
The final report of the Fund 2030 Review, Funds Sector 2030 A Framework for Open, Resilient and Developing Markets Final Report made recommendations regarding the taxation of investments. It also noted that changes to deemed disposal rules require guardrails to protect the Exchequer and ensure that appropriate taxation is paid.
Developing such guardrails requires careful consideration to ensure that any changes strike a balance between supporting retail investment while retaining important and necessary anti-avoidance protections. Changes to deemed disposal could have significant impacts on the revenue received from exit taxes.
As the Deputy may be aware, Budget 2026 included a commitment to publishing a roadmap for the taxation of retail investment, setting 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. The relevant recommendations of the funds review, including deemed disposal, are now being considered as part of the work under way in the Department of Finance on this roadmap. We will be publishing this in the coming months and in advance of the budget.
At the first Annual Savings and Investment Forum on 31 March, I announced the development of a new Irish investment account that aims to reduce the complexities related to retail investment taxation and allow Irish people to grow their savings more efficiently. The Account will be aligned with the European Commission’s recommendation to develop accessible, consumer-friendly savings and investment accounts across Member States, and will be included in the forthcoming roadmap.
