Funds review – Drive for Implementation

Over the last four decades or so, Ireland has established itself as a leading domicile for global investment funds. It’s a fantastic success story for the Irish economy, but Ireland has been less successful at encouraging retail investor participation in funds products. This is bad news for consumer’s financial outcomes, and for our ability to mobilise household savings into areas where investment is needed.

A key step that will help boost consumer participation in funds products is to address elements of our tax system that disincentivise consumers from this investment. The Department of Finance Funds Review sets out a number of recommendations for change to the way funds products are taxed. FSI is calling for the implementation of Recommendations 22 or 23 in Budget 2026.

Among the specific measures called for in these Recommendations are:

• Removal of the eight-year deemed disposal requirement. This rule means that means that after eight years, whether investors have actually realised the gains in their funds account or not, they are still liable to pay tax on any gains that have accrued
• Alignment of the Investment Undertaking Tax (IUT) and Life Assurance Exit Tax (LAET) with standard capital gains. These “exit taxes” on funds products are higher than the standard capital gains rate – a clear disincentive to investment in funds products

Implementation of these Recommendations, alongside the introduction of tax incentives that positively encourage consumer participation, is a priority for FSI. We’ll continue to work towards building a new investment culture in Ireland that delivers better outcomes for consumers and the economy, more opportunities for the industry, and helps place Ireland at the centre of the new European Savings & Investment Union.

Download FSI’s Prebudget 2026 submission below: