BOI Investment policy tax

cena · 18-09-2018 12:27am #1

I recivied a letter last on my low risk investment. It has made no money at all and they took a near 2000 tax deduction off me on September first for no money been made. I am pulling the policy out.

What I want to know is can I get this tax back.

Browney7 · 18-09-2018 10:55am

cena wrote: »

I recivied a letter last on my low risk investment. It has made no money at all and they took a near 2000 tax deduction off me on September first for no money been made. I am pulling the policy out.

What I want to know is can I get this tax back.

Is the value paid in less than the value that it was worth pre tax? When did the policy commence - sounds like an 8 year deemed disposal tax calculation.

Have you made any previous part encashments?

cena · 18-09-2018 11:24am

Browney7 wrote: »

Is the value paid in less than the value that it was worth pre tax? When did the policy commence - sounds like an 8 year deemed disposal tax calculation.

Have you made any previous part encashments?

Yes less than what I put in. 20,000 put in no worth just over 17. It was a rollover policy from last year. I was told 8 year tax thing. First I heard about it yesterday.

daheff · 18-09-2018 12:45pm

why are BOI taking the tax. Surely its self reporting & payment?

Also when did you first invest, and for how much?

cena · 18-09-2018 12:56pm

daheff wrote: »

why are BOI taking the tax. Surely its self reporting & payment?

Also when did you first invest, and for how much?

8 years ago. First 5 years I couldn't touch it. Took the amount it made after the 5 years. Just shy of 6000. Left it for two years before they contacted me to say I wasn't making anything.

So last year I split the money and invested into 2 low risk things.

I asked why it was taken. Was just told it was an 8 year thing. No explanation on why.

cena · 18-09-2018 12:58pm

Here is part of the letter

Browney7 · 18-09-2018 7:14pm

Sounds like the Secure Advantage structured product contract and it's clear from the numbers you've given it has made money so tax is due. 20 invested, cash paid out of 6k after five years and now worth 17 (not sure if before or after tax?)

What fund are you currently in - cash (which will lose money given low rates) or something else? Do you want an equity based investment or is capital security important to you? You should get independent financial advice but you should get clarification on the charging structure for your current/rollover contract and investment fund options for the current policy.

cena · 18-09-2018 11:47pm

Browney7 wrote: »

Sounds like the Secure Advantage structured product contract and it's clear from the numbers you've given it has made money so tax is due. 20 invested, cash paid out of 6k after five years and now worth 17 (not sure if before or after tax?)

What fund are you currently in - cash (which will lose money given low rates) or something else? Do you want an equity based investment or is capital security important to you? You should get independent financial advice but you should get clarification on the charging structure for your current/rollover contract and investment fund options for the current policy.

Ifunds and elements.

cena · 18-09-2018 11:55pm

Browney7 wrote: »

Sounds like the Secure Advantage structured product contract and it's clear from the numbers you've given it has made money so tax is due. 20 invested, cash paid out of 6k after five years and now worth 17 (not sure if before or after tax?)

What fund are you currently in - cash (which will lose money given low rates) or something else? Do you want an equity based investment or is capital security important to you? You should get independent financial advice but you should get clarification on the charging structure for your current/rollover contract and investment fund options for the current policy.

I want to make some money without losing any. I did make a nice profit on the first 5 years of 6000.

daheff · 19-09-2018 9:30am

cena wrote: »

I want to make some money without losing any. I did make a nice profit on the first 5 years of 6000.

did you pay any tax on the 6k you made & withdrew?

if so, you've doubled down on the tax paid & need to contact revenue.

If not, well ....death & taxes my friend

cena · 19-09-2018 9:59am

daheff wrote: »

did you pay any tax on the 6k you made & withdrew?

if so, you've doubled down on the tax paid & need to contact revenue.

If not, well ....death & taxes my friend

As far as I know tax was paid when I took out the 6000

cena · 19-09-2018 10:53am

daheff wrote: »

did you pay any tax on the 6k you made & withdrew?

if so, you've doubled down on the tax paid & need to contact revenue.

If not, well ....death & taxes my friend

Do you know what part of revenue I need to contact

Baby01032012 · 19-09-2018 11:07am

I think you need to make sure first that you declared the 6000 gain. BOI would have deducted CGT or probably income tax on that gain. That should then have been used as a credit against the exit tax on the deemed disposal. At the moment 17k deemed disposal value less 14 remaining cost is 3k gain @ 41% = 1.23k tax

cena · 19-09-2018 11:15am

Baby01032012 wrote: »

I think you need to make sure first that you declared the 6000 gain. BOI would have deducted CGT or probably income tax on that gain. That should then have been used as a credit against the exit tax on the deemed disposal. At the moment 17k deemed disposal value less 14 remaining cost is 3k gain @ 41% = 1.23k tax

I as far as remember 400€ government tax was paid

NewCorkLad · 19-09-2018 11:25am

OP if you hadn't withdrawn that €6,000 the current value of your fund would be circa €25,740 on which you would be now paying €2,353 exit tax after the 8 years. You need to check what if any tax you paid on your withdrawal 3 years ago, but BOI Investments are well used to dealing with these things and are always in charge of deducting the exit tax. There is no CGT or Income tax deducted from these policies.

NewCorkLad · 19-09-2018 11:26am

cena wrote: »

I as far as remember 400€ government tax was paid

Doesnt sound too far off the mark so.

cena · 19-09-2018 12:15pm

NewCorkLad wrote: »

Doesnt sound too far off the mark so.

What was the near 2000 tax that was taken out is want I want to know

Baby01032012 · 19-09-2018 12:16pm

NewCorkLad wrote: »

OP if you hadn't withdrawn that €6,000 the current value of your fund would be circa €25,740 on which you would be now paying €2,353 exit tax after the 8 years. You need to check what if any tax you paid on your withdrawal 3 years ago, but BOI Investments are well used to dealing with these things and are always in charge of deducting the exit tax. There is no CGT or Income tax deducted from these policies.

What I meant was exit tax that BOI would have withheld which is charged at the marginal tax rate of 41% for individuals or 25% for companies.

cena · 19-09-2018 12:16pm

NewCorkLad wrote: »

Doesnt sound too far off the mark so.

What was the near 2000 tax that was taken out is want I want to know

NewCorkLad · 19-09-2018 12:26pm

cena wrote: »

What was the near 2000 tax that was taken out is want I want to know

Roughly €2,352 would have been due on the full amount, you have already paid €400 and now they are taking the remaining tax.

cena · 19-09-2018 12:29pm

NewCorkLad wrote: »

Roughly €2,352 would have been due on the full amount, you have already paid €400 and now they are taking the remaining tax.

That doesn't sound right. Can I claim it back

NewCorkLad · 19-09-2018 12:33pm

cena wrote: »

That doesn't sound right. Can I claim it back

No unfortunately there is no way to avoid the exit tax on these investments.

cena · 19-09-2018 12:42pm

NewCorkLad wrote: »

No unfortunately there is no way to avoid the exit tax on these investments.

I haven't exit the policy yet. After the first 5 year I lift the money for two years without rolling over for a new policy.

NewCorkLad · 19-09-2018 1:15pm

But after 8 years it is deemed that there is a full encashment and has to be fully taxed. As of now there is no more tax due again for 8 years unless you exit the policy and there has been growth between now and then.

Browney7 · 19-09-2018 2:37pm

Correct - life assurance exit tax is applicable. Not CGT or Income tax.

The BOI tax is most likely right but if you are concerned, ask them for a calculation

cena · 19-09-2018 3:30pm

Browney7 wrote: »

Correct - life assurance exit tax is applicable. Not CGT or Income tax.

The BOI tax is most likely right but if you are concerned, ask them for a calculation

Right went to back and spoke to the manager. It was a government 8 YEAR tax. Would have been nice if the bank warned me about it and I would have pulled the policy fast.

The guy that does the investment in the bank was a waste of time. Did even try to talk to me to stay or give options.

NewCorkLad · 19-09-2018 3:33pm

cena wrote: »

Right went to back and spoke to the manager. It was a government 8 YEAR tax. Would have been nice if the bank warned me about it and I would have pulled the policy fast.

The guy that does the investment in the bank was a waste of time. Did even try to talk to me to stay or give options.

That wouldnt have made a difference you would have been taxed the exact same if you exited the policy a day earlier. You get taxed either on exit or else every 8 years if you do not exit the policy.

NewCorkLad · 19-09-2018 3:37pm

cena wrote: »

The guy that does the investment in the bank was a waste of time. Did even try to talk to me to stay or give options.

Ya thats the problem with the bank advisers they generally dont care unless its new business. Its bad form that he didnt even try explain the tax to you properly.

BOI Investment policy tax

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