Don't like how Ireland taxes investments? Now's your chance to do something about it!

[gardenlady]

The government is taking submissions for input from the public on the taxation of investments in Ireland. It is available here. The purpose is to simplify the system and get to "horizontal equity" (ie. where investment decisions are made based on the merits of the investment and not the different tax treatments). This is your chance to have your opinion heard about the challenges you face with the current system and changes you would like to see introduced.

Some points I will be considering raising:

• Many people are so confused by the different taxation systems that they are put off investing entirely
• Discussions of investment products usually boil down to relative taxation rather than the merits of the investment themselves (would anyone actually invest in JAM or FCIT if they were taxed the same as VWCE and VUAA?). People ultimately take on more risk and pay higher fees to avoid higher taxes.
• An ISA style system (where €X could be invested each yield and be shielded from tax, withdrawable at any time) would be a huge assistance to those saving for housing and would mean that lower earners wouldn't have to worry about tax at all
• A better investment landscape would help attract and retain top talent that the MNCs bring in to this country
• Deemed disposal's affect on compounding ultimately leads to smaller returns for the investor and as a result a smaller tax take for the government. If the government wants more regular tax take then perhaps they could restrict access to accumulating funds (I know this would be unfortunate but there will have to be compromises made somewhere - it would still be a hell of a lot better than it currently is)

These are points I will flesh out before I make a submission. What else am I missing?

Some people will be understandably sceptical of the government on this, but they have been doing a lot of work in this area over the last year or two and this is the best chance we'll get to make a difference. You can be sure that the life assurance industry will be lobbying hard for their own interests, so it is important that retail investors do all they can to make their own voices heard as well. IMO, anyone who complains about taxation on this or other fora should feel compelled to make a submission.

Edit: My submission is available here

 

[vescd]

@gardenlady Good idea.

Will definitely be making submissions to:
1. Abolish DD
2. Increase the CGT threshold above €1270 per annum
3. Reduce exit tax on investments to bring it in line with CGT

 

[tapedrawing]

@vescd Abolish DIRT

 

[gardenlady]

@tapedrawing Why do you think DIRT should be abolished?

I would have thought that DIRT was our simplest tax. It's a flat rate. It gets deducted at source in many cases. I don't think people are avoiding savings accounts because of DIRT.

 

[blazingflower420]

@gardenlady I wouldn't abolish DIRT but it should only apply above a certain tax free allowance. In the UK you get £1000 in interest before paying any tax but this threshold drops the more you earn eventually being consumed all together. It helps helps encourage savings for those on low to middle incomes

 

[keepwalking]

@blazingflower420 At the very least DIRT should align with the CGT threshold, people who don't have the capital to invest shouldn't be penalised.

 

[wasanapak]

@blazingflower420 We had that system in the 70s, every cunt out there had a dozen bank accounts to avoid it, this way everyone (with stupid exceptions) pays it. I'd probably get rid of the exceptions before I'd change anything else about it.

 

[blazingflower420]

@wasanapak In the UK it's a flat amount across all lending institutions afaik so it applys collectively to all your earned interest. Drops to 500 if you earn over 50k and 0 of you earn over 100k

 

[tapedrawing]

@gardenlady Because we pay enough tax. Our savings are already after tax income and interest is low enough as it is without taking almost half of what doesn't even offset inflation.

Abolish USC too.

 

[spiritsight]

@tapedrawing Reality is the country is very expensive to run and money has to come from somewhere. I think that there should be a tax free amount for DIRT similar to CGT but then you pay a tax

 

[shyamolishah1]

@spiritsight We should cut back on spending rather than creating more taxes

 

[tapedrawing]

@anon777 I know it's not double tax on the same income but it's just an extra tax to add to the ever growing list. When will it stop.

 

[soupy2209]

@anon777 Actual triple taxed. Inflation is also a government stealth tax.

 

[krusty]

@tapedrawing You can whine about paying too much taxes all you want. Still the government does need to be funded and DIRT is one of the smarter ways we have to do that.

Disincentivise hoarding money outside of the economy rather than taxing earnings or sales or other taxes we have to use.

 

[glorygirl16]

@krusty "Hoarding" or trying your best to save up for an unaffordable house?

 

[krusty]

@glorygirl16 Lad its 33%(DIRT rate) of 1% (Savings account rate), DIRT isn't the reason you can't afford a house.

 

[glorygirl16]

@krusty Sorry I misinterpreted your original comment. I thought you were comparing people trying to save with hoarding money.

Still savers need to save all they can and I'm sure most people would rather not have to pay it.

 

[bdmw3e]

@gardenlady You’re right, they’re not avoiding savings account because of DIRT, they’re avoiding them because rates are stupidly low

 

[soupy2209]

@gardenlady Because its doubly immoral to tax people saving money on money they largely already paid tax on. avings interest is the only basic compensation from the government's destruction of savings through their irresponsible increasing of money supply via central bank printing.

 

[vescd]

@tapedrawing Ideally sure, but it’s unlikely. It would just give a huge tax break to the super rich who pay a load of DIRT, and a small tax break to the rest of us