Revenue briefing on ETF taxation

This is the document you are referring to ? https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-27/27-01a-03.pdf

I think it will take a few readings and re-readings. This postscript I think is the kicker

[quote]1 Prior guidance confirmed that investments in ETFs domiciled in the USA, the EEA or in an OECD member state (other than the USA) with which Ireland has a double taxation treaty, follows precisely the treatment that would apply to share investments generally. That confirmation does not apply to such investments with effect from 1 January 2022.[/quote]

What a farce. Investing in Ireland is extremely complex and the tax regime is frankly ridiculous as it is. So to make matters worse they now bring US domiciled ETFs into the deemed disposal regime as well. What a kick in the teeth.

@Vicxas Probably nothing as the change above is in relation to ETFs only and you are talking about Shares (single stock only), unless I have missed something

Emigrate, it's the only solution.

Crazy . Stuff the government want everyone to be dependent upon the old age pension when they retire. I dont get this policy of capital gains every 8 years. Why save at all ? Many thats the game encourage consumers spending and pull taxes from that in the short term.

All I can say is, ****

Revenue don't wan't people to either save - DIRT - or to invest. If you have money to invest left over after living costs, they consider it as a professional sleight as it means they have messed up in not extracting enough. Seriously, the government wants you to consume and spend every single cent, apart from what they skim off.

The national debt per citizen in NZ is €25,299. In Ireland, it's €42,327. Both are Island economies with similar sized populations. NZ doesn't have the MNC advantage Ireland has, and yet they don't have death duties, they don't have DIRT, they don't have CGT and their version of vat is 15%. Fascinating.

We all know Greece is an economic basket case. Their national debt per citizen is €37,139.

The level of national debt per person in this country terrifies me; It's €90,346 per person in employment, given those number 2,250,500. Of course some of those employed people pay little or no tax, so it's even worse. Coupled with the Irish governments decades long MNC cargo cult, I can't see corporation taxation mitigating this in any way.

There is also the oncoming express train of CO2 related taxes rapidly inbound.

This move on ETFs is all part of the picture, which I personally believe will probably lead to deposit haircuts.

Why do they do this? Do they offer a logic for it? Why are we one of the only countries that tries to limit investment?

Question as old as time.

They want all the foreign investment they can get, but god forbid the locals want a slice!

My suggestion, move to Fermanagh! Tax free stocks and shares ISA + all the lakes you'd need!

That is until the unification of Ireland in 2024...

They can't justify VRT, or DIRT or levies on all forms of insurance and not allowing for inflation when calculating capital gains or still having the 'temporary' USC, 11 years after it was introduced, so why should they have to now? Wake up and leave.

I already did! I've lived in Australia for the last 8 years and have benefited hugely from investing but am moving home next year and already dreading dealing with the shambles of a system they've created. Here we have a standard system where ETFs are treated like shares (what a novel concept!) and capital gains are charged at your marginal tax rate with a 50% discount if you held the asset for 12 months or more. Losses can be carried indefinitely.

I used to think in Ireland they just didn't pay any attention to it as most people couldn't care less about investing but now it seems like it's a deliberate strategy and I just don't get it. I've never heard of any other country that has this deemed disposal rubbish.

what alternatives remain/are still attractive in light of this?

I'm already aware of that and have planned accordingly. A deemed disposal on breaking residency makes some sense and is common enough. A deemed disposal for just continuing to stay invested seems ridiculous and can cause major headaches due to timing.

Possibly UK investment Trust. Some say that they will be withdrawn from sale due to KIID rules in a few years. So the other option is to find conglomerate stocks, ideally with with no dividends.

I think you have the right idea Dude, write to your local TD's and the Finance & Public Expenditure Ministers, setting out in reasonable detail the cons of how ETFs and UCITS are dealt with from a tax point of view and particularly the risk associated with forcing less experienced investors down the riskier route of individual stocks. Every TD in every constituency needs to be targeted though to make a campaign effective. The rules are only going to change from political pressure

When Buffett is assassinated by the old hands of time, what then?

I do not hold others in the regard of Buffett, no matter how long they've working under him.

Yes,worth consideration.Pity domicile can't be "lost" but after 2 full tax years away who cares.

Revenue are simply out of the picture the minute you have a foreign address and that address is used by the financial institutions you have dealings with. So weeks/months, not years. I know that's not what Revenue think or would like you to think, but it's the real world practical reality.

Foreign financial institutions are obliged to report your transactions to their tax officials, or revenue directly, if you live in in Ireland. The minute you change the address of your accounts with them to 17, Widgeemultha st, Woolloomooloo, Sydney, you are no longer a foreigner and they cease to have any obligation to communicate your dealings to a foreign government.

This is particularly relevant for that stupid idea of revenue's that a disposal of assets within 3 years of emigrating means you owe them the CGT. That one is possessed of so much 'neck', I actually find it hilarious.

One explanation for the Revenue's position is lobbying by brokers, fund managers and other financial people. They have so much to gain from management fees that anything which lessens the attractiveness of passive funds and ETFs puts more business into their hands.

The whole thing is obscene and indefensible.

Has anyone sought out professional tax advice on this? Heard a podcast recently where a pensions platform manager mentioned that they had sought tax advice and Canadian ETFs would now be treated the same as UCITs ETFs for taxation purposes but that most US ETFs would still qualify under the CGT regime as they have a different structure.

I'm interested in hearing about the major Vanguard ETFs in particular, VTI, VOO etc.

It’s the only explanation I can come up with either. Either that or they want to pump up the property market.

Most likely lobbying from brokers.

I haven't sold and I'm only seeing the eBrief today.

Has anyone actually received a definitive answer yet? I read the thread on AAM and here, but none the wiser. It also doesn't state when the deemed disposal kicks in (e.g. if I'm holding for a decade, previous guidance does not apply, am I liable to fines and interest on all my holdings?), even if it does so?

Honestly thought the taxation couldn't get any worse, absolutely bonkers.