Financial services - Budget 2027

Investment Accounts

Minister Harris confirmed that the new “Investment Accounts” regime will commence on 1 July 2027 and will feature:

• An annual investment limit of €12,000, with no minimum investment requirement.
• A tax-free threshold of €50,000, with a flat-rate tax of 1% applying to amounts held in excess of this threshold.

This announcement follows the publication of the “Roadmap for Taxation of Retail Investors” in August, which provided further detail on the operation of the new regime.

The roadmap confirmed that eligible investors will be Irish tax resident individuals aged 18 or over, with one Investment Account permitted per person. A child-focused version of the scheme is expected to be introduced at a later date.

Responsibility for the calculation, reporting and payment of taxes will rest with account providers, helping to simplify administration for investors. Eligible providers are expected to include banks, MiFID investment firms, regulated fund managers and insurance companies.

Eligible investments will include listed shares, bonds, regulated ETFs and insurance-based investment products. Higher-risk asset classes, including cryptocurrencies and derivatives, will not qualify.

Importantly, there will be no minimum holding period or lock-in requirement. The roadmap also envisages the transfer of Investment Accounts between providers, where feasible, on a tax-neutral basis.

While further legislative detail is expected in the Finance Bill, the introduction of Investment Accounts represents a significant step towards simplifying retail investing and encouraging greater long-term participation in capital markets.

Exit Tax

The Minister announced a reduction in the rate of Investment Undertaking Tax and Life Assurance Exit Tax from 38% to 35%.

This measure is consistent with the Government's commitment to implement the Fund Sector 2030 Review’s recommendation to align the Exit Tax rate with the Capital Gains Tax rate by 2030.

The reduced rate will also apply to investments in equivalent EU funds, ensuring compliance with EU free movement principles and maintaining consistency in the taxation of domestic and equivalent overseas investment products.

While the rate reduction is a welcome development, the Budget did not include any measures to progress a number of the other recommendations contained in the Fund Sector 2030 Review. In particular, there was no announcement regarding the abolition of the eight-year deemed disposal regime or the introduction of loss relief between investment products. These measures remain key priorities for many stakeholders and would further simplify the taxation of retail investors while improving the competitiveness of Ireland's investment fund regime for domestic investors.