The Deputy has asked for further information in relation to the estimated cost of removing deemed disposal.
As was set out in the response to Parliamentary Question 270 of 27 November 2025, the cost of deemed disposal not applying in a given year had an estimated cost of €142 million based on data for the previous eight years. It is important to note that the information available to Revenue does not allow them to isolate the tax returned due to deemed disposal rules from other events which give rise to a tax liability. The response also noted that the actual cost could vary where the proportion of tax which is deemed disposal is higher or lower, as well as where the gains in a particular year are larger or smaller than the eight-year average used for this estimate.
This estimated cost of removing deemed disposal in a given year was calculated using a revenue foregone model, considering the reduction in the current tax yield for taxation of investments and life assurance policies. This is one of the approaches to costing identified as appropriate in the Department of Finance Guidelines on the Cost of Tax Expenditures.
As the Deputy notes, there is a significant sum currently invested in deposit accounts. There is certainly potential for savings in deposit accounts to move to more active investments. However, any gains arising from a move from savings to investments are likely to take place over the longer term, and would be unlike to impact immediately, in contrast with the immediate impact of a reduction in taxation paid where deemed disposal did not apply.
As part of their work on savings and investment accounts the European Commission considered the potential impact of introducing savings and investment accounts, improving financial literacy among the population, and fostering a broader ‘equity culture’ to increase the retail participation of EU households in EU capital markets. They also considered the potential fiscal impacts of SIAs on Member States at the EU level, while noting that there are a lot of variables that could affect the analysis for different Member States. The analysis suggests that these changes would have a positive impact. The staff working document published with the Commission's Recommendation on Savings and Investment Accounts sets out the analysis undertaken and is available at: eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025SC6800
While the impact of such changes was not included in the calculation of the estimated cost associated with the removal of deemed disposal of €142 million, they are being considered in the context of the work underway on the roadmap for the taxation of retail investments, which I intend to publish in early 2026.
