Most people dealing with unit fund investments will see the fund manager deduct tax on gains every eight years and return the details to Revenue.
It has long been a bone of contention with the industry which argues that the existing tax regime is inimical to investors and cuts into their returns. The Minister has indicated that he is open to change but his officials will no doubt be mindful of any dramatic change on the current tax revenue that investment funds deliver for the exchequer.
This provides for the payment of tax to Revenue on any individual’s gains by the fund managers on the eighth anniversary of the investment, and every subsequent eighth anniversary. That rate has changed over the years but Revenue’s justification has always been that the rate is set to account for the fact that Revenue leaves the money untouched for that eight-year period to maximise investor returns at a cost to the exchequer over that time.
To further complicate things, some funds are not taxed at source and these will be your responsibility. These include offshore funds where you may have an obligation to account for tax on the same deemed disposal basis. In this case, you would do that through your tax return in the relevant year.