Rate of deemed disposal tax on investment funds to reduce to 35% from January
Irish Finance Minister Simon Harris announced a reduction in the 'deemed disposal' tax rate on investment funds from 38% to 35%, effective January 2027. Despite calls to abolish the rule, the government opted for a incremental reduction to encourage investment.
Why it matters
The deemed disposal rule is a controversial tax policy in Ireland that critics argue discourages long-term retail investment in ETFs.
THE RATE OF ‘deemed disposal’ tax on investment funds will reduce from 38% to 35% from January, finance minister Simon Harris has announced.
Deemed disposal is a tax that applies every eight years to collective investments such as exchange-traded funds (ETFs), a specific type of fund which allows buyers to track the performance of a group of shares.
It was introduced by the Irish government during the Celtic Tiger to avoid people keeping their money in funds for decades on end without triggering a tax.
In other countries, buying into an ETF is seen as an easy way to invest in the broader stock market, which tends to be a good investment over the long term, rather than the riskier option of investing in individual equities.
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