We were featured in this Sunday Times article by Niall Brady
Frustrated fund managers and savers suffering paltry deposit rates will keep feeling the pain while they are stuck within a two-tier tax structure
Marc Westlake, the managing director of Global Wealth, a Dublin financial adviser, was a lot more prescriptive: steer clear of all unit-linked funds sold by the life insurance industry through banks and brokers.
“I’d avoid life assurance company contracts entirely where all income and gains are subject to a flat rate exit tax of 41% currently,” posted Westlake.
Why commit to such highly taxed investments when, as pensioners older than 65 who were likely to earn less than €36,000 a year, Silversurfers and his wife would be completely exempt from income tax? Better to invest directly in the stock market because gains would be taxed at 33% and dividends would likely be tax-free.
Westlake’s advice gained added currency just before Christmas when a government working group found there was no case for cutting the 41% tax on funds. Its conclusions came as a blow for the funds industry, which had lobbied hard for the exit tax to be reduced in line with the Dirt charged on savings accounts at banks and credit unions.
The tax handicap means many fund investors would be better off switching their money to State Savings, which pays guaranteed returns of 0.33%-1.5% a year tax-free, depending on the investment term, according to Westlake.
See our analysis here
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