Dáil Éireann Debate, Wednesday - 27 May 2026
53. Deputy Emer Currie asked the Tánaiste and Minister for Finance if his attention has been drawn to the perspectives shared at recent hearings held by the Oireachtas Committee on Finance regarding the need to adopt a coordinated and/or sequenced approach to the abolition of the deemed disposal rule and the introduction of new personal investment accounts; and if he will make a statement on the matter. [40406/26]
View answerThe deemed disposal rule 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. It was introduced in Finance Bill 2006 to prevent the indefinite roll-up of income and gains, and the associated loss of tax to the Exchequer.
Under the deemed disposal rule, tax is levied eight years after an investment is made, and every subsequent eight years, regardless of whether 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.
I acknowledge the complexities associated with the deemed disposal rules, but as articulated in the Funds Review 2030 report, any changes to these rules require guardrails to protect the Exchequer and ensure that appropriate taxation is paid. A balance between supporting retail investment while retaining important and necessary anti-avoidance protections, taking account of potential Exchequer impacts, is required and incredibly important.
I am committed to taking the necessary action to support retail investment in Ireland. Budget 2026 introduced 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%. This change also applies to investments in Exchange Traded Funds (ETFs) that are taxed under these regimes.
Budget 2026 also included a commitment to publish 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.
As I announced at the first annual Savings and Investment Forum, on 31 March, another key aspect of the roadmap is the development of a new investment account that aims to reduce the complexities related to retail investment taxation and which allow individuals to grow their savings more efficiently. Department officials are continuing to engage with experts and stakeholders as work is progressing on the development of the account, taking on board the range of ideas on the design of an effective investment account in Ireland that best fits the Irish economy and the needs of Irish households, including the discussions on Proposed Retail Investment Schemes and Tax on Deemed Disposals at the Joint Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation and Taoiseach.
The investment account will be a key aspect of the roadmap, which will also take into consideration the recommendations of the Funds Review, including regarding the issue of the deemed disposal rule, into consideration. The roadmap is expected to be published in summer 2026.
