Evaluating the Best DCA Investment for Our Son: ETF vs. Investment Trust in Ireland

[fredmach]

@gmundo Im not so sure about that, but its horrific at the current rates

 

[fritz524]

@fredmach ETF tax structure is so beyond infuriating every time I see it. How have we had Fine Gael, the “pro-business” party in power so long and this hasn’t shifted. Can’t see possible incomers of SF/SD prioritising it either…

 

[fredmach]

@fritz524 It's only a few years ago this was a 23% tax. Maddening. And I don't mind 41%, its the 8 year anniversary DD that's the killer. Its obviously designed to inhibit investment in these vehicles.

 

[willumg]

@fredmach The deemed disposal calculation in the update is not correct, it's far too big.

At the first disposal only the growth on the initial 6000 and first 6000 of monthly contributions should be taxed.

The following year the growth on the next 6000 of monthly contributions should be taxed. And so on.

The file is counting all the monthly contributions made in the first 8 years as part of the growth of the initial 6000. This significantly overstates the tax (by about 650%) and decreases the ETF value.

The IT has the same problem, 33% tax is applied to the total value of the fund, not the growth of the fund.

 

[fredmach]

@willumg Apologies for the weak oversight, it was a candlight calculation. But once I revise it on these observations, the gap between the IT and ETF nett value will only increase. I'll update the figures ASAP. Thank you