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Revenue pulls tax guidance on ETFs Thumbnail

Revenue pulls tax guidance on ETFs

From the Sunday Times

Hundreds of retail investors have been left in limbo after Revenue unexpectedly withdrew guidance on the taxation of exchange-traded funds (ETFs), a popular and inexpensive way of tracking global investment markets.

Those affected have ETFs domiciled in America and other non-EU countries, which they believed were liable to 33 per cent capital gains tax under guidance issued by Revenue in 2015. This guidance has been scrapped, however, leaving investors unsure about how their ETFs will be taxed from next year.

The fear is that some may become liable for the 41 per cent exit tax imposed by Revenue on EU-domiciled funds. As well as taxation at a higher rate, this would deprive investors of the ability to shield taxable gains on their ETFs by claiming for the considerable losses suffered in the past on bank and Eircom shares.

“We’ve gone from relative clarity to utter confusion in the blink of an eye,” said Marc Westlake of Global Wealth, a financial adviser. “ETFs will now have to be assessed forensically to determine how they should be taxed and at what rate.”

Revenue said it was no longer possible to provide general guidance on ETFs because of “continual developments” in investments and regulation. “The UK leaving the EU is one example of a change that has an impact on Revenue’s ability to give general guidance on non- Irish ETFs,” it said.

To see an Irish Times article on the taxation of ETFs, please click this link

The good news 

We now have a written opinion from our Tax consultants and we are able to provide investment solutions to investors looking to invest personal savings (as distinct from ARF and Pension accounts) under general tax principles rather than exit Tax also known as gross roll up.

To book time to discuss a particular portfolio requirement (minimum investment €100,000) please use this link  (booking fee applies)

Options available include portfolios of US ETFs via our Discretionary Investment Management Service.

We can also provide portfolios of UK Investment Trusts via our Advisory Investment Management Service

An analysis of our value added strategies using real client data over the last decade can be found here and in this document 

If you are interested in investing in a Sustainable/Ethical Portfolio which is optimised for Irish Tax, please click to our Portfolio Site 

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