Publication of the "Ireland for Finance Strategy" and the Roadmap for Taxation of Retail Investment

The Department of Finance (the “DoF”) recently published the “Taxation of Retail Investment: A New Path Forward for Ireland”, which sets out a roadmap for the simplification and adaptation of an Irish tax framework for retail investment in future national budgets (the “Roadmap”). The DoF also recently published a strategy paper entitled “Ireland for Finance Strategy Vision 2030 – Renewed and Refocussed for a Digital Age”, which sets out the Government’s plans to ensure that Ireland remains a leading international financial centre into the future (the “2030 Strategy”).  

In this briefing, we review certain proposals provided for in the Roadmap, including the new retail investment account which is to be available from 2027, as well as some of the key actions set out in the 2030 Strategy relevant to the investment funds and asset management sector. 

Roadmap for the Taxation of Retail Investment

1. New Investment Account

The introduction of a new retail investment account (“IA”) is the centrepiece of the Roadmap and Government’s wider programme to encourage greater participation by Irish households in capital markets and to support the development of the EU’s Savings and Investment Union (“SIU”). The Government intends to introduce the legislative framework in the Finance Bill this year, with IAs expected to become available from 2027. The new IA presents a major commercial opportunity for investment firms, credit institutions and other regulated firms operating in the investment funds and asset management sector. 

The Roadmap leaves the matter of fees up to eligible IA product providers. Government officials have indicated fees of up to 1.5% per annum will be permitted, by providers. 

Further details will be available once announced as part of Budget 2027.

Key features of the IA include:

• Annual flat-rate tax will only apply to the account value above a tax-free threshold, with no deemed disposal and tax charged will be final.
• No minimum contribution requirement.
• Maximum annual contribution limit (which is to be confirmed in Budget 2027).
• Eligible investors are Irish resident individuals, aged 18 and over, who hold a PPSN.
• Providers must be qualifying providers, to include MiFID-authorised service providers, regulated fund managers and insurers or firms regulated under the Insurance Distribution Regulations (IDR).
• Providers will calculate, report and pay any tax due on behalf of the investor.
• Eligible investments will include listed shares, listed bonds, financial instruments traded on a regulated market, a range of investment funds suitable for retail investors, including ETFs. Insurance-Based Investment Products (IBIPS) will also be eligible.
• Highly complex and risky products such as derivatives and crypto assets will be excluded.
• Legislation will not provide for a minimum holding period or lock in period, ensuring investors have full flexibility to access their funds and/or withdraw from the IA when they wish.
• Fees applied by providers are expected to be minimal and competitive by international standards. 

2. Removal of the Deemed Disposal Rule

The deemed disposal rule was introduced in Finance Act 2006. It is an anti-avoidance mechanism designed to prevent the indefinite deferral of taxation under the gross roll-up regime. Under the deemed disposal rule, tax is levied eight years after the original investment is made, and every subsequent eight years thereafter. 

The deemed disposal rule has long faced criticism as it creates a tax liability in respect of unrealised gains. It is also criticised due to its impact on the compounding of returns within a long-term investment. Furthermore, it creates administrative difficulties for retail investors where they are required to account for tax due under self-assessment. 

The Roadmap acknowledges that the investment landscape has changed since the introduction of the deemed disposal rule, with more products that operate under the self-assessment system, such as ETFs, now available to a wider range of investors. The Roadmap cautions, however, that this has increased awareness of the application of the deemed disposal rule among investors, but not necessarily that the deemed disposal rule operates as a prepayment of tax rather than an additional liability.  

Budget 2026 reduced the exit tax rate applying to Irish and equivalent offshore funds, and Irish and certain foreign life assurance products, from 41% to 38%. Building on that change, the Roadmap identifies the review (and possible removal) of the deemed disposal rule as one of three key levers that will be considered as part of the existing regime for the taxation of retail investments in the context of Budget 2028 and beyond (following the introduction of the IA in Budget 2027). This has the potential to simplify the current tax regime. 

The Roadmap suggests that another option would be to apply different rates of tax for different chargeable events, including reducing the rate that applies to the deemed disposal rule, recognising its role as essentially a pre-payment of tax that would be due on the ultimate disposal of an asset. This would, however, introduce more complexity in the system and, therefore, may not make retail investment more attractive. As such, the Roadmap indicates that whilst the Government remains open to changes to the deemed disposal rule, there is no firm commitment to its removal.

It should be noted that the current taxation regime for retail investment, including the deemed disposal rule, will not apply to the new IA.

3. Investment Undertaking Tax (IUT)

The Roadmap indicates that IUT could be reduced to the 33% capital gains tax (“CGT”) rate. Aligning the rates of exit tax with the rate of CGT could reduce the perceived complexity arising from the different tax rates applicable to investment in certain financial instruments. It may also provide investors with greater flexibility in developing diversified investment strategies by reducing the extent to which tax considerations influence investment decisions.

4. Administrative Simplifications

The existing taxation regime for investment funds is considered overly complex and may discourage investment. The complexity is especially  pronounced for investments in ETFs and offshore funds. Proposed simplification measures include introducing a bespoke tax regime for Irish retail investors investing in ETFs and other funds held through recognised clearing systems, alongside changes to the reporting requirements for the making of investments in offshore funds/products.

Ireland for Finance Vision 2030

The 2030 Strategy outlines the Government’s overarching vision to establish Ireland as a globally leading, future-focussed international services hub – renowned for excellence, innovation, and trust. The 2030 Strategy also aims to promote sustainable economic growth across the EU while additionally supporting the objectives of the SIU. Ireland’s strategy for strengthening its position as a leading international services centre is supported by four core ambitions: 

• Trusted: Reinforcing Ireland’s status as a competitive, predictable and stable location for international financial services;
• Scalable: Delivering scale and expertise to be an enabler of economic growth in the EU and exporter outside EU; 
• Digital: Leveraging technology to support digital transformation and mitigate against risks from AI; and
• Localised: Developing links between the international financial services sector and Irish businesses and citizens.

A number of actions have been provided for in the 2030 Strategy to support the above ambitions, which are of interest to the investment funds and asset management sector, and include the following:

1. The simplification and modernisation of financial services legislation: 

Government initiatives and commitments include:

• supporting the efficient and timely transpositions of financial services legislation, with a focus on high impact legislative files; 
• supporting the development of tokenisation of investment funds and examination of relevant domestic legislation, including the Irish Collective Asset Management Vehicle Act (ICAV Act) and the Companies Act, with a view to the modernisation of the legislation where needed; and
• the modernisation of the 1907 Limited Partnership Act to support growth in private assets, particularly investment in venture capital. For more information on the proposed modernisation of the 1907 Limited Partnership, see our insight here: Public Consultation on Reforms to the Irish 1907 Limited Partnership

2. Thematic Focus on High-Impact Areas:

Digital Assets and Tokenisation: The Government recognises that the convergence of blockchain technology, tokenisation, and digital cash equivalents will strengthen its engagement with industry on digital assets policy through periodic specific roundtables, including with key international stakeholders, that will involve convening a new Digital Assets Industry Group. The Government is also committed to legislative change to support tokenisation of investment funds, with the Central Bank having recently published a Discussion Paper to industry on distributed ledger technology and tokenisation in financial services.

Funds and Asset Management:

• ETFs: The Strategy notes the importance of Ireland as a domicile for ETFs. For example, ETF assets under management in Ireland stood at €630 billion in Q4 2020 and reached €1.89 trillion in Q4 2025 – a threefold increase representing a compound annual growth rate of 25%. The 2030 Strategy confirms the need to support lower costs for investors in ETFs.
• Private Assets: the 2030 Strategy supports the continued growth and evolution of private asset markets and expansion of access to private equity, private credit, real estate and infrastructure investment. European private markets are forecast to exceed €5 trillion AUM by 2030. The Government is in the process of and has already put meaningful measures in place to support the development of Ireland as a domicile for private funds i.e. introduction of legislative and regulatory changes to align with AIFMD II and the planned modernisation of the 1907 Limited Partnership structure.
• Sustainable Finance: Ireland is highlighted in the 2030 Strategy as a hub for sustainable finance. As at Q3 2025, Ireland hosted €2 trillion of so-called ‘Article 8’ funds and €36 billion of so-called ‘Article 9’ domiciled funds. Ireland is actively engaging in the development of the EU’s SFDR 2.0 framework, advocating for a practical product categorisation system that seeks to minimise global regulatory fragmentation.

Commentary

In both the Roadmap and the 2030 Strategy, the DoF has set an ambitious direction for Ireland’s investment funds and asset management sector, with a clear emphasis on moving from policy development to delivery. Key priorities include encouraging Irish citizens to engage with investment products and capital markets, progressing legislative reforms to support private assets and fund tokenisation, and establishing governance structures to monitor delivery. The emphasis on legislative innovation, competitiveness and the scaling of digital assets is likely to create new opportunities in Ireland as a jurisdiction of choice for investment, and firms should closely monitor the implementation of the 2030 Strategy to ensure they are well positioned to capitalise on these opportunities.

The publication of the Roadmap is an important milestone in addressing the current taxation system for retail investment. Firms should monitor developments in the upcoming Budget and Finance (No. 2) Bill 2026, and future budgets. The proposed changes to the taxation are intended to make retail investment products simpler and more attractive to investors, which in turn, will create opportunities for firms to further develop and streamline their investment product offerings.

Byrne Wallace Shields can assist firms in tracking the development and implementation of key actions arising from both the Roadmap and 2030 Strategy, as well as assessing business requirements, impacts and opportunities as further details emerge.

For more information and advice on these updates, please contact David Naughton, Doireann O’Daly and Mina Dawood of our Investment Funds and Financial Services Regulation Department and, Anthony Smyth, Adrian Watson and Kevin Brophy of our Tax Department or your usual BWS contact.