Dáil Éireann Debate, Thursday - 10 April 2025
163. Deputy Naoise Ó Cearúil asked the Minister for Finance if he considers that the deemed disposable rule is a disincentive to investment; if he plans any changes in relation to this; and if he will make a statement on the matter. [18240/25]
Amharc ar fhreagraFinance Act 2000 introduced the gross roll-up taxation regime for investments in domestic funds and life policies. The general thrust of the regime is that there is no annual tax on income or gains arising within the investment. However, exit tax must be deducted on the occurrence of a “chargeable event”, which originally included –
- the making of relevant payments,
- the redemption of the investment, and
- the transfer by an investor of their investment.
Finance Act 2006 introduced the eight-year deemed disposal requirement for all investments that benefited from the gross roll-up regime. This was introduced as a new category of ‘chargeable event’, designed specifically to prevent the avoidance of tax by way of indefinite deferral of tax.
In October 2024, my predecessor published the ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’, a wide-ranging review of the funds and asset management sector. The Report arising from the Review sets out a series of recommendations to ensure that, in pursuit of continued growth in the funds and asset management sector, Ireland’s funds sector framework remains resilient, future-proofed, supportive of financial stability and a continued example of international best-practice. Recommendations 22 and 23 include consideration of the removal of the eight-year deemed disposal requirement for Irish domiciled funds and life products.
The 2025 Programme for Government has committed to progress and publish an implementation plan taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow this sector in Ireland. Recognising the complexities within the current regime for the average retail investor, my officials are reviewing options for measures that could be taken to assist with retail participation in capital markets. This work will also take account of developments at an EU level in respect of the Savings Investment Union.
