Budget 2027 Ireland – Taxation of Investments

Taxation of investments. Exchange Traded Funds (ETFs). Offshore Funds. UCITS, Irish domiciled funds. Life Assurance Policies. Personal and Corporate Tax

Today, 6^th October 2026, the Tánaiste has announced exciting changes for investments in his Budget 2027 speech. These updates will soon become law under the Finance (No.2) Bill 2026.

New Investment Account

The government is introducing a brand new Investment Account starting 1^st July 2027. This follows the European Commission’s 2025 recommendation on Savings and Investment Accounts.

The Minister confirmed a direct tax cut starting 1^st January 2027. The government is reducing both the Investment Undertaking Tax (IUT) and Life Assurance Exit Tax (LAET) rates. The tax rate will drop from 38% to 35%, marking a 3 percent reduction.

Furthermore, corresponding reductions will apply to equivalent offshore funds. Certain foreign life assurance policies will also benefit from this lower rate. These changes mark a major step in reforming retail investment products.

Key Features of the New Investment Account

The new account aims to simplify retail investment. It reduces barriers for individuals and provides a straightforward, tax-efficient framework.

The core rules of the Investment Account include:

1. Eligibility: Available to Irish residents aged 18 and over who hold a PPSN.
2. Taxation: A flat 1% tax rate applies to the account value above a €50,000 tax-free threshold.
3. Contributions: A maximum annual limit of €12,000 applies, with no minimum limit.
4. Account Rules: Investors can only hold one account per person at launch.
5. Providers will calculate the account value daily. They will use the average daily value to determine any tax due.

Exemption from Deemed Disposal and Traditional Taxes

Crucially, these accounts will operate entirely outside the scope of current investment taxes. Therefore, investors will not pay Capital Gains Tax (CGT) or Dividend Withholding Tax. They are also exempt from IUT and LAET.

In addition, the Tánaiste confirmed that the eight-year deemed disposal rule will not apply to assets held inside this account.

Eligible Products and Hands-Free Administration

To make investing easier, eligible providers will manage all tax reporting, administration, and Revenue payments. These providers include MiFID-authorised service providers, regulated fund managers, and insurance companies.

At launch, investors can hold the following products in the account:

• Shares and bonds
• Investment funds,
• ETFs
• Insurance-based investment products

Investment Undertaking Tax

The Investment Undertaking Tax (IUT) rate is dropping from 38% to 35%. This tax cut applies to Irish-domiciled unit trusts, authorised investment companies, and ICAVs.

Life Assurance Exit Tax

The Life Assurance Exit Tax (LAET) rate is dropping from 38% to 35%. Specifically, this change affects policies contracted since 2001 with Irish-domiciled life assurance companies.

Equivalent Offshore Funds

Offshore ETFs (Exchange Traded Funds) and funds, which are considered equivalent to Irish domiciled funds, will see a tax cut from 38% to 35%. Specifically, this applies to investments across the EU, EEA, or OECD partner countries. Additionally, Finance (No.2) Bill 2026 will update the rules in relation to units held in recognised clearing systems. As a result, Irish-domiciled ETFs in a recognised clearing system will also qualify for the 35% tax rate.

Foreign Life Assurance Policies

Ireland is cutting the tax rate on specific offshore life assurance policies from 38% to 35%. Consequently, this lower rate applies to policies started after 2001 through companies, agencies, or branches in the EU, EEA, or OECD partner countries.

For full information, please click: https://www.gov.ie/en/department-of-public-expenditure-infrastructure-public-service-reform-and-digitalisation/publications/your-guide-to-budget-2027/

For all your Personal Tax compliance and advisory requirements, please contact us at info@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.