Emer Higgins
Ceist:79. Deputy Emer Higgins asked the Minister for Finance his plans to review the 41% exit tax charged on life-wrapped funds sold by life assurance companies and from exchange trade funds. [11282/23]
Amharc ar fhreagraTuesday, 7 March 2023
Ceisteanna (79)
Freagraí scríofa
Exit tax charged on life assurance polices and investments in domestic funds including ETFs is a collection mechanism that is coupled with the gross roll-up regime. The gross roll-up taxation regime for investments in domestic funds and for investments in life policies was introduced in Finance Bill 2000. The general thrust of the gross roll-up regime is that there is no annual tax on income or gains arising within the investment. However, exit tax must be deducted on the occurrence of a “chargeable event”, which includes a “deemed disposal” at the end of every 8-year period to prevent indefinite roll-up within the fund or policy. The rate of exit tax applied is generally 41% in the case of an individual.
As the Deputy will be aware, the Commission on Taxation and Welfare, published their report Foundations for the Future in 2022. The Commission considered how the overall balance of taxation might shift in order to sustainably fund public services over the longer-term and made a range of recommendations aimed at improving the sustainability of the taxation and welfare systems.
The Commission recommended the establishment of a working group to examine and make recommendations for modernising the taxation and administration of investments. That is why, in his Budget speech, my predecessor announced the intention to commence a review of these areas.
Specific detail on the parameters of such a review and timelines are still being worked out. Once a thorough consideration of the matter takes place, I will share the terms of reference.
Question No. 80 answered with Question No. 69.