Looking for Advice on Investing in Ireland

By John McNicholas

Published on: October 12, 2022

Having clearly defined and articulated their goals, we work with our clients to implement a bespoke investment portfolio that is aligned to their objectives, values and philosophy about money. We offer investors a choice of portfolios with a common philosophy applied to all – low cost, tax efficient, and globally diversified.

Assuming you have no mortgage debt and are already making full use of your pension allowances, what is the most tax efficient option for an investor in Ireland today? Is it beneficial to buy an investment from a Life Insurance Company or a Stockbroker or attempt to DIY via an online platform like Degiro?

The answer, as with many things, is ‘it depends’.

Do you want to complete a self-assessment tax return?

If the answer to this is no, then the “best” or at least the least bad option for you is going to be a packaged life insurance bond where all the tax issues are taken care of for you.

The advantages of this approach are

  • Simplicity – all the taxation issues are taken care of for you

The disadvantages of this approach are

  • Lack of transparency and lack of investment choice
  • A flat rate of tax of 41% applies to all income and gains which may be higher than your personal rates under general tax principles

Assuming you are happy to complete a self-assessment tax return then your options are as follows

  • Invest in “offshore funds” including UCITS and ETFs in the EU
  • Invest in UK Investment Trusts
  • Invest in non-EU ETFs via a Discretionary Investment Manager

The good news is that though our investment consulting service we can facilitate all of these options for our clients and have completed a detailed analysis of the tax treatment of each option which can be found in our tax guide here

In summary the options are as follows:

 

Investment Tax on IncomeTax on GainsChargesComplexity
UCITS funds including EU ETFs41%41%Passive funds and ETFs Can be very low but some UCITS are actively managedAcquiring a material interest in an “offshore fund” can be extremely complex especially if making regular contributions
UK Investment TrustsGenerally marginal rates of income tax but some may be funds at 41%Generally capital gains tax 33% but some may be funds at 41%Can be very low but some trusts have higher charges. FX costs, dealing charges, spreads and stamp duty are additional costsCan be relatively complex with discounts and premiums to net asset value to consider, some have gearing through bank debt and other considerations such as liquidity of smaller trusts
Non – EU ETFsCan be general tax principles or Exit Tax depending on how the fund is structuredCan be general tax principles or Exit Tax depending on how the fund is structuredGenerally very low compared to Irish fundsRequire a discretionary investment manager to purchase if not a professional investor
Individual stocksGeneral tax principlesCapital gains taxDepends on how purchasedNo generally recommended as higher risk that using ETFs and funds

 

Further information can be found in Our Guide to Investing in Ireland Download Guide