Pearse Doherty (Donegal, Sinn Fein)

We discussed this on Second Stage. This section deals with the reduction in the tax rate on ETFs and other Irish-domiciled investment funds from 41% to 38%. Was 41% chosen because it was the personal tax rate at the time? It does not really matter why it was chosen. It has gone down to 38%. The Minister indicated that this is a step, and that it will go down to 33%. Perhaps he can clarify that in his response with regard to the funds proposal.

There were a number of other proposals, including the deemed disposal issue, which many people thought the Minister was going to deal with now. Has he signalled that he is dealing with that issue? Obviously, if people are investing today, they want to know whether that issue will apply in eight years or not. I have made the point to the Minister in the past that there is an important issue in terms of deemed disposal, which is that there should be no hoarding of wealth within these structures that does not get tapped into in a way that means the benefits that accrue from all of that are exempted from taxation. However, that has to be balanced with the position of individuals who are looking to save, given that, in some cases, the returns are far better but it is riskier than with a traditional bank. Is the Minister looking at getting rid of the deemed disposal rule - the eight-year rule – altogether, or is he looking at a threshold idea, where up to a certain amount would not fall under the deemed disposal rule? I would like the Minister to clarify his intention, or maybe he does not have a set position at this point in time. What is the position in this regard?

On a broader issue, if we were having this discussion a number of years ago, the people this section would have been applicable to would have been few and far between. It is different now, when there are young lads out there buying shares on Revolut. In the past, they would have had to go to a broker but it is now happening on their phones, and they are buying a share for a fiver or buying into ETFs and all of that. I have always praised Revenue in relation to the efficiency of that section in every Finance Bill I have ever dealt with. However, if we look at the taxation information regarding ETFs, it is very hard to follow. There is no single taxation law for ETFs themselves, and it is obviously part of the greater fund issue, but it also depends on whether the ETF is located in Ireland, the European Union or outside of that, if it is Irish-domiciled, and all of that. Many people go on their phone and use Revolut, Trade Republic and all of these different apps. In most cases, they do not have a clue where the ETF is located or domiciled in the first instance. Even if they were to look at the Revenue guidance, I would argue that its guidance is more for professionals because it is very technical and there does not seem to be a simple analysis of what is required.

One of the cases I dealt with recently involved somebody who had read on one of these threads that when they purchased an ETF or a stock - it does not matter how they purchased it, but they purchased it on Trade Republic or a similar app - they had to declare it to Revenue.

My understanding is that was the case. It may not be the case now but I cannot find the information anywhere and I am used to going on to the Revenue website and being able to look at the guidance on that. We will have to look at this because these funds are now far more widely available and people are doing this with their Revolut accounts, etc. As far as I understand it, since around 2024 the requirement to include this in a person's self-assessment form is no longer there unless it is an offshore fund. Again, how you find that out is also problematic. I just wanted to raise that point in terms of the simplification of this given the fact that this is now widespread even though it might be at a small level but people are buying into investments on their mobile phones.