Dáil Éireann Debate, Tuesday - 19 June 2018
152. Deputy Seán Barrett asked the Minister for Finance his plans to revise or remove the deemed disposal rule which was introduced in the Finance Act 2006; and if he will make a statement on the matter. [26538/18]
Amharc ar fhreagraFinance Act 2000 introduced the gross roll-up taxation regime for investments in certain investment undertakings and life assurance policies. Generally the regime provides that there is no annual tax on income or gains arising within the investment. Instead, tax applies at an investor level.
Finance Act 2006 introduced the concept of deemed disposals every 8 years 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 being rolled up 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.
The 8 year deemed disposal rule is not currently under review at this time.
