On 6 February 2025, Goodbody and the Chartered Accountants Ireland hosted the Investment Taxation in Ireland webinar. The key areas of discussion included the Funds Sector 2030 Review Report, a guide to taxes by investment vehicle and strategic approaches that investors can take with their portfolios. Here Goodbody Head of Tax Catriona Coady outlines the 4 key takeaways from what was an interesting panel discussion.
1. Change is likely coming – but it’s not here yet
There were 42 recommendations set out in the Fund Sector 2030 Review Report which included an alignment of the funds tax rate to the Capital Gains Tax (CGT) rate (currently 33%) and a removal of the eight-year deemed disposal rule. These recommendations could help encourage retail participation in investment markets which may have previously been avoided due to high tax rates or an overly complex tax regime versus potential return on investment. The implementation of even some of these recommendations may help to clear the way for investors to stop assessing investment vehicles, in some cases, solely by tax treatment and instead assess the appropriateness of the investment vehicle for their particular investment needs. For now, we don’t have a sense of when these changes will be implemented but the Report makes it clear that there is further work to do.
2. Auto-enrolment will have an impact, but there is much to consider for employers and employees
Auto-enrolment is due to begin in September 2025 and while it creates more administrative work for employers, it lays the groundwork for employees with no private pension to save more regularly for their retirement. That being said, there are nuances around auto-enrolment that both employers and employees will have to deal with when the system is up and running. For example: situations where an individual is working and already drawing a pension, has more than one employment and no private pension, and differing tax treatment on death benefits to other private pension arrangements.
3. Succession planning in a changing global landscape
Ireland continues to have strong economic links to the UK and US which can result in an exposure to UK and US taxes in Irish estates. US Federal Estate Tax (US FET) typically arises in Irish estates where the level of US assets in the estate is in excess of $60,000. The most common US assets within the scope of US FET include US real estate, shares in US corporations, interests in US mutual funds and US registered ETFs or other US domiciled funds, and so on. In the US, given promised tax cuts, there’s the possibility of Federal Estate Tax being reduced or abolished and this is something that will need to be kept under review. The UK non-domicile regime and UK inheritance tax rules are also going through significant change prompting Irish workers/retirees in the UK to consider the impact of these changes on their affairs and assess whether now is the right time to move back to Ireland. Changing international tax regimes should provide Ireland with an opportunity of playing to its strengths including offering a stable environment in which to make investment decisions.
4. What we are hoping to see in Budget 2026
Overall, we would like to see work beginning on the implementation of the recommendations of the Review in the context of the removal of the eight-year deemed disposal rule and the alignment of the funds tax rate with the CGT rate. We can’t encourage greater participation in capital markets with complex or high taxation levels, and we believe retail participation will stay low without a revision to the tax regime governing investments. The webinar coincided with the launch of the Investment Tax Guide 2025, a copy of which can be requested here. For more information on how Goodbody can support your investment needs please get in touch here.
