Dáil Éireann Debate, Tuesday - 8 September 2020
300. Deputy Neasa Hourigan asked the Minister for Finance his views on the deemed disposal rule which was introduced in the Finance Act 2006; his plans to revise same; and if he will make a statement on the matter. [22141/20]
View answerFinance Act 2000 introduced the gross roll-up taxation regime for investments in certain investment undertakings and life assurance policies. The regime provides that there is no annual tax on income or gains arising within the investment. Any tax arising applies at the level of the investor.
Finance Act 2006 introduced an 8 year deemed disposal rule in relation to these investments. A deemed disposal occurs 8 years following inception of a policy of life assurance or acquisition of a fund and then every 8 years thereafter. The deemed disposal rules also apply to equivalent offshore funds. Any gain on the investment which arises from the date of inception or the date of acquisition to the date of the deemed disposal is subject to tax. This ensures that income isn’t rolled up indefinitely in life assurance policies or funds without being taxed. On the ultimate disposal of the investment, any tax paid which arose as a result of a deemed disposal is allowed as a credit against any final tax liability on disposal.
There are no plans to review the 8 year deemed disposal rule at this time.
