Brokers Ireland 2023 Pre-Budget Submission

Tue May 30 2023

Brokers Ireland pre-Budget 2024 submission makes the following recommendations:

  • Proposed Exit Tax Incentive Scheme for Responsible Investment Products.

Brokers Ireland would like to propose an incentive scheme for personal investments, where if they are made exclusively into funds qualifying as ‘ESG’ or equivalent, they would attract a reduced rate of exit tax at 25%. We propose this in tandem with the proposal that the standard exit tax rate would be reduced to 33%.

To participate in the scheme, life assurance companies would be required to offer a separate category of ‘ESG’ investment bond policies. The investor in an ESG policy would be permitted to select only from the set of ESG funds on offer from the provider, and switches during the life of the policy could only be made within that group. The only exception to this that we suggest is to permit the inclusion of a cash fund in the eligible mix, as investors should be allowed the option of temporarily de-risking their positions without making an encashment from the policy.

  • Remove the 1% Life Assurance Premium Levy.
  • Link the life assurance exit tax (LAET) rate to the Capital Gains Tax rate of 33% to ensure consistency and equality in the taxation of returns from investment in risk assets between life assurance and collective investment funds and direct investment in such assets.
  • Index the pensions earnings limit for tax relief on personal pension contributions of €115,000 in line with growth in average earnings over the previous year, starting on 1st January 2024.
  • Recommence indexation of the Standard Fund Threshold limit in line with growth in average earnings over the previous year, starting on 1st January 2024.
  • Allow salary/service lump sum option on taking retirement benefits from a PRSA, in addition to the 25% fund option.
  • Allow PRSA retirement benefits to be taken on ill health early retirement at any time, using the same Revenue Practice definition as currently applies to schemes.
  • Retain current taxation of ARF balances on death. We urge the retention of the current 30% flat tax rate on ARF inheritances taken by adult children of the deceased.

SEE FULL BUDGET 2024 SUBMISSION


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