Ciarán Ahern (Dublin South West, Labour)
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371. To ask the Minister for Finance his position on the eight-year deemed disposal rule in the capital gains tax system; whether he would consider abolishing this rule; and if he will make a statement on the matter. [39619/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I note the Deputy refers to the eight-year deemed disposal rule in the capital gains tax system. I understand this to be a reference to the eight-year deemed disposal rule that applies to investment undertakings that benefit from the gross roll up-regime as described below.

Finance Act 2000 introduced the gross roll-up taxation regime for investments in domestic funds and life policies. The general thrust of the 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 originally included –

- the making of relevant payments,

- the redemption of the investment, and

- the transfer by an investor of their investment.

Finance Act 2006 introduced the eight-year deemed disposal requirement for all investments that benefited from the gross roll-up regime. This was introduced as a new category of ‘chargeable event’, designed specifically to prevent the avoidance of tax by way of indefinite deferral of tax.

In October 2024, Minister Chambers published the ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’, a wide-ranging review of the funds and asset management sector. The Report arising from the Review sets out a series of recommendations to ensure that, in pursuit of continued growth in the funds and asset management sector, Ireland’s funds sector framework remains resilient, future-proofed, supportive of financial stability and a continued example of international best-practice.

The Funds Review Report included eight recommendations to promote increased retail participation in capital markets. Recommendations 22 and 23, which concern taxation, include consideration of the removal of the eight-year deemed disposal requirement for Irish domiciled funds and life products and alignment of tax rates across different investment choices.

The 2025 Programme for Government has committed to progress and publish an implementation plan taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow this sector in Ireland. This is a complex area of taxation that encompasses a wide breadth of tax legislation on domestic funds, life assurance products and offshore funds. Detailed consideration is therefore being given to the best way to bring about the necessary reforms and to support a greater level of retail investment in capital markets. It is likely, given the breadth of the Funds Sector 2030 Report, and the work involved, that where appropriate tax measures are identified, the delivery of those measures may take place over multiple Finance Bill cycles. This work will also take account of developments at an EU level in respect of the Savings Investment Union.