Emer Currie (Dublin West, Fine Gael)

Budget 2026 has come at a time of global uncertainty with risks of tariffs and instability on the European Continent. This is a budget that seeks to invest in our future while securing the jobs, prosperity and stability that families and businesses depend on today. I also recognise that the programme for Government outlines progress on issues such as reducing childcare costs and college fees and removing the means test for the carer's allowance over multiple budgets. While these are longer term commitments, it is important we continue to take concrete steps each year to ensure families, carers and students see steady improvements in reducing the cost of vital services as well as the expansion of key supports for those who need them most.

I take the opportunity to raise the issue of the deemed disposal for exchange traded funds, ETFs. Over recent months, many of my hardworking constituents have highlighted this rule as a significant barrier to effective financial planning. At a time when we should be encouraging responsible long-term saving and investment, the current system acts as a disincentive. I welcome the reduction in the exit tax rate announced in the budget from 41% to 38% but until we remove the deemed disposal rule, the problem remains.

As the Minister will know, the funds sector 2030 review recommends the removal of the eight-year deemed disposal rule for Irish-domiciled funds and life assurance products and the alignment of tax rates for investment undertakings with the standard capital gains tax rate. The difficulty with deemed disposal is clear. After eight years, investors face a tax liability on unrealised gains, often forcing them to sell part of their holding to meet the bill. This not only reduces their position in the fund but also undermines the power of compounding the very principle that underpins long-term investing. Alternatively, if investors set aside cash in advance, that money is denied the chance to generate additional returns. In both cases, a real opportunity cost arises. Removing deemed disposal would address this inefficiency and improve outcomes for savers. A further inequality lies in the treatment of loses. Under the capital gains tax regime, investors can offset loses against gains, reducing their overall liability. Under the exit tax applied to ETFs, however, no such offset is allowed. As a result, ETFs are less tax efficient than individual shares in a mixed portfolio despite their broader diversification benefits.

The issue must also be seen in the wider economic context. According to the Central Bank, Irish households held €162 billion in deposits at the beginning of 2025. In an environment of inflation and modest interest rates, these savings are steadily losing value. Redirecting even a portion of this capital into productive investment through ETFs would support households, deepen our capital markets and benefit the wider economy.

I also welcome the commitment in the budget to publish a funds review roadmap in the new year. Building on the implementation plan for the funds sector 2030 review, I ask the Minister to ensure, as part of this roadmap, the operation of the deemed disposal rule is examined in detail, with a view to delivering a fairer and more effective framework for long-term retail investment. I would very much welcome the response of someone with his vast experience on ETFs. I have put quite a bit of work into researching it but I know the Minister's insights will be very valuable for my response to constituents who have raised this issue with me in detail.

Reforming this area is not simply a technical adjustment. It is about giving ordinary savers the confidence to invest, ensuring their money works harder for them and for Ireland. By modernising the rules and treating ETF investors on the same basis as other asset holders, we can foster a stronger culture of long-term saving, deepen our domestic capital markets, and, ultimately, deliver more resilient growth for the State. I thank the Minister.

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