Séamus McGrath (Cork South-Central, Fianna Fail)
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440. To ask the Minister for Finance the reasons the deemed disposal issue relating to exchange-traded funds was not addressed in Budget 2026 and if he intends to address it in the future. [57770/25]

Barry Heneghan (Dublin Bay North, Independent)
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506. To ask the Minister for Finance if his Department is committed to implementing the findings of a report (details supplied), specifically related to measures that would encourage households to save money for future financial gains including changes to the deemed disposal; and if he will make a statement on the matter. [59478/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 440 and 506 together.

The Deputies have asked about deemed disposal rules for investments.

Deemed disposal rules are an anti-avoidance measure that apply to investments in Irish domiciled investment funds and life assurance products, as well as equivalent offshore funds and certain foreign life assurance products. Under the deemed disposal rules, tax is levied eight years after an investment is made, and every subsequent eight years, regardless of whether or not a disposal has in fact occurred. The tax is levied on any gain in the value of the investment from the date of acquisition to the date of the deemed disposal. On the ultimate disposal of the investment, any tax paid is allowed as a credit against the final tax liability.

The taxation of ETFs depends on the domicile of the ETF. Irish domiciled ETFs invested by Irish residents are subject to the tax regime that applies to equivalent offshore funds in the EU, EEA or in an OECD member state with which Ireland has a double taxation agreement and are therefore subject to deemed disposal because of the deemed application of the offshore rules.

The final report of the Funds Review, ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’ was published in October 2024 and included recommendations to support and encourage retail investment, including the removal of deemed disposal. A focus on retail investment is also a key aspect of the European Union Savings and Investment Union.

I am very conscious of the concern of existing retail investors, and the importance of encouraging and supporting retail investment. As a first step in this regard, Finance Bill 2025 includes provision for a reduction in the rate of taxation that applies to Irish and equivalent investment funds and Irish and certain foreign life assurance policies from 41% to 38%.

However, the taxation of investments is complex. Therefore, as I announced in Budget 2026, my officials are developing a roadmap to be published early next year, setting out an approach to simplify and adapt the tax framework to support retail investment in future Finance Bills. This roadmap will take into account the European Commission’s recommendation on Savings and Investment Accounts which provides a blueprint for savings and investment accounts to help achieve the objective of boosting retail participation in capital markets.