Fine Gael\u2019s Regina Doherty said the deemed disposal rule on exchange traded funds (ETFs) was an \u201cunfair stealth tax\u201d.<\/p>\n
Her call comes as the EU is pushing for the setting up of a Savings and Investment Union to foster a greater investing culture through more accessible retail investment products that would be available across 27 member states.<\/p>\n
Diplomats say some \u20ac11tn is kept in bank or savings accounts by EU savers, rather than invested in European companies.<\/p>\n
ETFs are investment funds that hold a basket of securities and trade on an exchange, and can be invested like an individual stock.<\/p>\n
They are popular in other countries, such as the US, as they offer diversified investment to an industry or set of companies, and are low cost.<\/p>\n
They are often viewed as an easy and affordable entry point to investing.<\/p>\n
However, under the deemed disposal rule, Irish investors must pay a 38pc tax on any growth in their investment after eight years, even if they have not sold it or withdrawn any money.<\/p>\n
Ms Doherty said: \u201cIrish people are rightly trying to make their money work better for them by saving and investing for the future.<\/p>\n
\u201cMany choose simple, low-cost funds like ETFs. But under Irish rules, they\u2019re hit with a 38pc tax on their gains every eight years even if they don\u2019t sell, and the same 38pc again when they eventually cash out.<\/p>\n
\u201cThat means people are taxed on paper gains they haven\u2019t actually received. It simply isn\u2019t fair and it needs to change.\u201d<\/p>\n
She said the rule acts to \u201cpunish sensible investing\u201d. The MEP described deemed disposal \u201can unfair stealth tax on people who are trying to do the right thing with their savings and start investing\u201d.<\/p>\n
Earlier this week it emerged that T\u00e1naiste and Minister for Finance Simon Harris is expected to bring a memo to Government in the coming weeks which will set out a roadmap for the introduction of a new savings and investment strategy. The T\u00e1naiste said he believes hard working people must get better returns on their savings and that Ireland should follow other EU countries in introducing a savings and investment model. This week also the Banking and Payments Federation Ireland called on the Government to introduce a domestic savings and investment account to encourage long-term investing and strengthen household financial resilience.<\/p>\n
This would likely be similar to the British ISAs (Individual Investment Accounts) which are tax-efficient. Investors pay no income tax on the interest, dividends, or gains they earn on up to \u00a320,000 invested in an ISA.<\/p>\n
On Wednesday, the governor of the Central Bank of Ireland told the Government it should take steps to enable greater participation by households in financial markets.<\/p>\n
In his annual letter to the Finance Minister, Gabriel Makhlouf said it should be a policy priority to support household resilience, and to address any barriers that prevent domestic businesses from getting finance.<\/p>\n
More retail participation would also support Irish and European capital markets, which have suffered an exodus of firms to US stock exchanges, he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Fine Gael\u2019s Regina Doherty said the deemed disposal rule on exchange traded funds (ETFs) was an \u201cunfair stealth…\n","protected":false},"author":2,"featured_media":297303,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[72,3361,61,60,3362],"class_list":["post-297302","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-charlie-weston","tag-ie","tag-ireland","tag-money-experts"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/297302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=297302"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/297302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/297303"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=297302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=297302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=297302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}