Life Company Investments: Funds Tax

For Irish-Resident individuals with funds invested with an Insurance Company in Ireland, the tax treatment of such an investment is as follows. Please note that these taxes don’t apply to Pension funds or Charities.

On Initial Investment:

A 1% Government Levy is applied on the sum invested with a Life Company. From a self-reporting tax perspective this investment does not require disclosure by the Investor.

While Invested:

There are no tax filing obligations while holding the investment. Any growth on the value of the investment accrues via ‘Gross Roll-Up’ for the first 8 years.

Fund switches within an ‘umbrella’ policy are not taxable events.

All fees paid on the funds are not subject to VAT and are deducted from within the policy, therefore they are tax deductible as such.

On Exit from, sale of investment or death:

A tax rate of 41% is chargeable on the profits on the encashment of the fund, on death or after 8 years. This 41% tax is deducted automatically at source and remitted to Revenue by the Insurance Company. This 41% rate is irrespective of what rate of Income Tax the investor(s) pays i.e. Standard Rate or Marginal Rate.

VAT

There is no VAT chargeable with annual fees or on gains from investments serviced by a Life Company.