Thanks for the great video! I was looking at the most recent videos on ETFs and investment in Ireland, great to have yours. "Budget 2025 will contain a pro-business package, including changes to the tax system to encourage innovation and investment" said the Taoiseach so let"s hope DD and tax rate (amonst others things) for ETFs will change.
Informative video as per, thanks so much. Quick question. When investing, every source speaks about the power of compound interest, especially the longer you're in the market. So my question is, in terms of compund interest, would it not be better to invest in just one index fund rather than in three? I understand re diversification, but I'm finding it tough deciding which strategy (1 fund vs 3) would be more financially beneficial in the long term. Thanks!
There isn’t a one size fits all solution here. Some people prefer a single all-world fund, others prefer owning the three component funds individually. Neither of these strategies is guaranteed to outperform the other as it would totally depend on the allocation of your funds across the three funds and the investment returns of each compared to the single all-world fund
Hi Dan love the content only came across you recently and I'm now set up with trade republic. Great job so it is. Are ETF's still a better route than individual stocks due to the 41% tax? (Paid every 8 yrs) Do you think this taxation will ever be reduced? Thanks
Glad to hear you're enjoying the content! The TLDR for deemed disposal (DD) in my opinion is that, yes, it's annoying, but you've virtually 0% chance of outperforming the performance of passively managed index funds over the long-term with a portfolio of individual stocks even after accounting for the differences in taxation. Tax isn't the only consideration to take on board when investing and far too many people get hung up on DD and ignore the overwhelming benefits of index fund investing as a whole. Fingers crossed this year's budget will adopt some changes to make ETF investing more tax efficient either way!
One major thing that stops me investing in Index funds in the taxes.I cant find anywhere that explains how to do the taxes. Especially when you invest on a regular basis..Trying to figure out the 7 year disposal for all those seems like an absolute nightmare
Same! Would love to leave the money in there but last person I want to owe money to is the revenue. Only use them for investments under a 7 year Time horizon , car fund , big holidays, house work
Hello Dan, looking into that and the only thing missing is some info regarding tax reporting... please, can U get us understanding this part of investing
Please can you do a video on how to link your pension funds with a brokerage so we can invest that money in a similar way? My pension provider doesn’t have the index funds you mentioned.
If you’re with a provider like Irish Life they have funds which hold similar assets to popular index funds. For example, Irish Life, Zurich and more all have funds that track North American companies similar to the S&P500. Brokerage linking to a pension is largely unavailable in Ireland as much as I wish it wasn’t
Hi Dan, Is it worthwhile investing by yourself as opposed to investing via a pension fund. I have been battling with this thought for awhile as I like to have entire control over my investments which can’t be done via a pension. But by not using a pension I will occur large taxes when I eventually sell. I would value your advise on what may be a good way to navigate this. Thanks and keep up the good work!
Would love a simple explanation of how exactly investing in S&P500 via your pension works exactly. Moving back to Ireland next year after a long time away and trying to get a plan together for my savings.
Best way is to pick a ‘mutual fund’ that’s offered by the pension provider where the underlying assets of the fund mirror that of the S&P500 either identically or somewhat closely
Would you know how to pay this interest earned either DIRT or 41% ? Is it automatic processes when declaring in your tax return? If you could tell us where in the tax return form we have to declare interest earned through T212 and TR for example? Thank you
Is there a video on the safety of saving/investment with substantial funds? Eg trade Republic i think have a deposit guarantee with your cash of 100,000 but only 20,000 (if that) with investments. How can someone invest over say 100,000 if it's not covered in any scheme? Seems very risky.
Your perception of “very risky” is somewhat misguided but that’s perfectly normal. All of these firms are subjected to the highest of regulatory standards which in and of itself significantly reducing the likelihood of a financial institution’s failure. Ask yourself, when have you ever heard of one in recent memory when specifically a brokerage failed and lost its customers investments? Secondly, most if not all of these brokerages utilise “asset segregation” techniques whereby your investments are held separately to the assets of the brokerage. Meaning, even in the event of a the brokerages demise, your assets would be perfectly safe. It’s only in extremely unlikely circumstances that a true investment loss would be suffered due to the failure of a financial institution. Watch this video for more detailed info: th-cam.com/video/InMiQ8ilTqQ/w-d-xo.htmlsi=0bEeqKELANBQi6OY
You didn't mention investing in Bonds which I think it is slightly more tax efficient than ETFs. If you buy bonds at discount rates, you can effectively avail of the CGT exemption for the first 1270 euros which is better than the 41% exit tax that ETFs fall under.
What you’re forgetting is that historical equity returns have vastly outperformed bond returns over the long term resulting in pretty much no likely scenario where bonds will outperform equity ETFs after taxation. I also cannot emphasise enough that taxation is not the only consideration to take on board when investing. Irish investors tend to get far too caught up in the 41% tax rate and lose sight of the bigger picture.
@@malone_financial I agree with your statement but I also do believe that in the short term at least and from a tax perspective bonds are worth considering. I also don't agree that tax should be overlooked when investing. The deemed disposal tax for instance cancels out any compounding that you can have. The key here is to buy bonds at a discount so to maximise the yearly CGT exemption. There is no such trick when it comes to ETF I am afraid.
It seems the 41% tax rate makes the gains comparable to other investments like dividends, bonds. I hope Ireland changes their system so EFTs and CGT become taxable income similar to dividends and rental income, which is how UK and Australia do it.
Great video ! I have questions might be stupid but do you think saving money long term like trade republic is good idea or not ? Appreciate it ! Also some comments in here are sus be careful guys
Ultimately, investing in index funds is always going to outperform straight saving over the long-term. In the words of John Bogle (founder of Vanguard) "invest you must". Saving with Trade Republic and other high interest accounts is great for short term returns
@@malone_financialHi Dan, I split savings between trade republic and trading 212, how is trade republic more tax efficient when it comes to using these as savings accounts?
@@malone_financialbetter off in Zurich or standard life fund product, they would work out the tax especially if you are a regular investor, as trying to track the dates for deemed disposal are a nightmare if doing through a broker.
Essentially, interest earned via Trade Republic is liable to DIRT at 33% because it's earned via a deposit structure. Interest earned via Trading 212 is liable to 41% as it's earned via an investment fund structure. As a result, based on the rates currently on offer (3.75% for TR and 4.20% for T212), the net after-tax result for TR is slightly better than T212 for the first €50,000. However, that can all change as interest rates change and as tax rates change, it's ever-evolving!
Has anyone heard that investing in the Berkshire stock is a good hedge against the SNP500? As a means of avoiding the 41% capital gains and deemed disposal rule
That'd be an outlier case from what I've experienced. Could be some sort of bug going on with what was submitted. Perhaps worth reaching out to them on it!
Once they verify you they constantly ask you to verify where your funds come from too. Uploaded 10 documents by email so far that were accepted in march now another request for the same funds from the app. Annoying
► Try out Trade Republic*: trade.re/Dan
► Try out Trading 212*: www.trading212.com/invite/11QS32TKvw
Would love to see an up to date video on taxes on etf in Ireland and how to file for them etc..
Thanks in advance!
Same here, awfully confusing and ridiculously high.
Will keep it in mind, I’m holding out for the Budget before publishing any ETF taxation content (as it could all change then)
Please post more video’s they are class
Been watching your videos for a while! Eventually setup an account on Trade Republic! Thanks for all the information! So helpful
No problem, thanks for watching!
Great video as always Dan, keep the content coming!
Great video Malone
Cheers!
good to see you back, more content please, nd maybe rethink the thumbnails slightly
Thanks for the great video! I was looking at the most recent videos on ETFs and investment in Ireland, great to have yours. "Budget 2025 will contain a pro-business package, including changes to the tax system to encourage innovation and investment" said the Taoiseach so let"s hope DD and tax rate (amonst others things) for ETFs will change.
Fingers crossed 🤞
Informative video as per, thanks so much.
Quick question. When investing, every source speaks about the power of compound interest, especially the longer you're in the market. So my question is, in terms of compund interest, would it not be better to invest in just one index fund rather than in three? I understand re diversification, but I'm finding it tough deciding which strategy (1 fund vs 3) would be more financially beneficial in the long term. Thanks!
There isn’t a one size fits all solution here. Some people prefer a single all-world fund, others prefer owning the three component funds individually. Neither of these strategies is guaranteed to outperform the other as it would totally depend on the allocation of your funds across the three funds and the investment returns of each compared to the single all-world fund
Hi Dan love the content only came across you recently and I'm now set up with trade republic. Great job so it is.
Are ETF's still a better route than individual stocks due to the 41% tax? (Paid every 8 yrs)
Do you think this taxation will ever be reduced?
Thanks
Glad to hear you're enjoying the content! The TLDR for deemed disposal (DD) in my opinion is that, yes, it's annoying, but you've virtually 0% chance of outperforming the performance of passively managed index funds over the long-term with a portfolio of individual stocks even after accounting for the differences in taxation. Tax isn't the only consideration to take on board when investing and far too many people get hung up on DD and ignore the overwhelming benefits of index fund investing as a whole. Fingers crossed this year's budget will adopt some changes to make ETF investing more tax efficient either way!
@@malone_financial Thanks so much this was the answer I was expecting but wanted your opinion 😁
One major thing that stops me investing in Index funds in the taxes.I cant find anywhere that explains how to do the taxes. Especially when you invest on a regular basis..Trying to figure out the 7 year disposal for all those seems like an absolute nightmare
Fingers crossed this year's budget will make ETF investing more attractive from a tax perspective!
Hard to make money work even to get kids to invest with the 8yr deemed disposal. Kids see it grow and don’t understand how tax works
Same! Would love to leave the money in there but last person I want to owe money to is the revenue. Only use them for investments under a 7 year Time horizon , car fund , big holidays, house work
Thats exactly what they want, you to not try be financially free because its too "complicated!!"
Don’t pay the tax and that’s your problem solved
Hello Dan, looking into that and the only thing missing is some info regarding tax reporting... please, can U get us understanding this part of investing
I've lots of videos covering taxation already! Have a browse and you'll likely find what you're looking for
Please can you do a video on how to link your pension funds with a brokerage so we can invest that money in a similar way? My pension provider doesn’t have the index funds you mentioned.
If you’re with a provider like Irish Life they have funds which hold similar assets to popular index funds. For example, Irish Life, Zurich and more all have funds that track North American companies similar to the S&P500. Brokerage linking to a pension is largely unavailable in Ireland as much as I wish it wasn’t
Hi Dan,
Is it worthwhile investing by yourself as opposed to investing via a pension fund. I have been battling with this thought for awhile as I like to have entire control over my investments which can’t be done via a pension. But by not using a pension I will occur large taxes when I eventually sell.
I would value your advise on what may be a good way to navigate this.
Thanks and keep up the good work!
Maximising pension contributions before engaging with a personal investment portfolio is, in my opinion, the best choice for long-term investors
@@malone_financial is there a way you can create a pension where you have control of your investments?
Would love a simple explanation of how exactly investing in S&P500 via your pension works exactly. Moving back to Ireland next year after a long time away and trying to get a plan together for my savings.
Best way is to pick a ‘mutual fund’ that’s offered by the pension provider where the underlying assets of the fund mirror that of the S&P500 either identically or somewhat closely
@@malone_financial Appreciate it
Would you know how to pay this interest earned either DIRT or 41% ?
Is it automatic processes when declaring in your tax return?
If you could tell us where in the tax return form we have to declare interest earned through T212 and TR for example? Thank you
There’s dedicated sections for both foreign interest (DIRT) and investment fund income (41% tax) on the MyAccount declare income section!
@@malone_financial thank you
Is there a video on the safety of saving/investment with substantial funds? Eg trade Republic i think have a deposit guarantee with your cash of 100,000 but only 20,000 (if that) with investments. How can someone invest over say 100,000 if it's not covered in any scheme? Seems very risky.
Your perception of “very risky” is somewhat misguided but that’s perfectly normal. All of these firms are subjected to the highest of regulatory standards which in and of itself significantly reducing the likelihood of a financial institution’s failure. Ask yourself, when have you ever heard of one in recent memory when specifically a brokerage failed and lost its customers investments? Secondly, most if not all of these brokerages utilise “asset segregation” techniques whereby your investments are held separately to the assets of the brokerage. Meaning, even in the event of a the brokerages demise, your assets would be perfectly safe. It’s only in extremely unlikely circumstances that a true investment loss would be suffered due to the failure of a financial institution.
Watch this video for more detailed info: th-cam.com/video/InMiQ8ilTqQ/w-d-xo.htmlsi=0bEeqKELANBQi6OY
What’s your thoughts on investing with Revolut ?
Never saw a reason to, better and more established options available elsewhere (like TR and T212)
You didn't mention investing in Bonds which I think it is slightly more tax efficient than ETFs.
If you buy bonds at discount rates, you can effectively avail of the CGT exemption for the first 1270 euros which is better than the 41% exit tax that ETFs fall under.
What you’re forgetting is that historical equity returns have vastly outperformed bond returns over the long term resulting in pretty much no likely scenario where bonds will outperform equity ETFs after taxation. I also cannot emphasise enough that taxation is not the only consideration to take on board when investing. Irish investors tend to get far too caught up in the 41% tax rate and lose sight of the bigger picture.
@@malone_financial I agree with your statement but I also do believe that in the short term at least and from a tax perspective bonds are worth considering.
I also don't agree that tax should be overlooked when investing. The deemed disposal tax for instance cancels out any compounding that you can have.
The key here is to buy bonds at a discount so to maximise the yearly CGT exemption. There is no such trick when it comes to ETF I am afraid.
It seems the 41% tax rate makes the gains comparable to other investments like dividends, bonds. I hope Ireland changes their system so EFTs and CGT become taxable income similar to dividends and rental income, which is how UK and Australia do it.
Great video !
I have questions might be stupid but do you think saving money long term like trade republic is good idea or not ?
Appreciate it !
Also some comments in here are sus be careful guys
Ultimately, investing in index funds is always going to outperform straight saving over the long-term. In the words of John Bogle (founder of Vanguard) "invest you must". Saving with Trade Republic and other high interest accounts is great for short term returns
@@malone_financialHi Dan, I split savings between trade republic and trading 212, how is trade republic more tax efficient when it comes to using these as savings accounts?
@@malone_financialbetter off in Zurich or standard life fund product, they would work out the tax especially if you are a regular investor, as trying to track the dates for deemed disposal are a nightmare if doing through a broker.
Hi Dan, I split savings between trade republic and trading 212. Why is it that trade republic is better the way that it is taxed?
Essentially, interest earned via Trade Republic is liable to DIRT at 33% because it's earned via a deposit structure. Interest earned via Trading 212 is liable to 41% as it's earned via an investment fund structure. As a result, based on the rates currently on offer (3.75% for TR and 4.20% for T212), the net after-tax result for TR is slightly better than T212 for the first €50,000. However, that can all change as interest rates change and as tax rates change, it's ever-evolving!
XTB 0% fee up to 100k per month
Has anyone heard that investing in the Berkshire stock is a good hedge against the SNP500? As a means of avoiding the 41% capital gains and deemed disposal rule
The Trade Republic support is completely Zero I feel. I opened an account and still not been verified for the last 1 week. Any idea on this
That'd be an outlier case from what I've experienced. Could be some sort of bug going on with what was submitted. Perhaps worth reaching out to them on it!
Once they verify you they constantly ask you to verify where your funds come from too. Uploaded 10 documents by email so far that were accepted in march now another request for the same funds from the app. Annoying
One third of your profit belongs to the country. Profit €100,000, tax €30,000. You can buy a Tesla with that money.
Still better get 70 grand than leaving your not invested money on Irish banks losing value for inflation every day
No one , but no one has ever given anyone free advise on how to make money. Sorry mate
@@dexter161 successful people will usually just tell you. It’s the unsuccessful people who charge for advice.
I have