New investment scheme with annual tax-free threshold of €50k to kick in next July

FINANCE MINISTER SIMON Harris has shared more details about the new state-backed investment scheme. 

Announcing Budget 2027 in the Dáil, the Fine Gael leader said Irish people have a strong culture of saving, yet participation in investments remains very low.

He said investing can be complex, inaccessible and “something that is reserved for those with significant wealth or significant expertise”.

“We, as a government, want to change that.”

So when will the new account open?

The new personal investment account will be available to any Irish tax resident over the age of 18, with one account permitted per person.

The account will open on 1 July 2027 and will be legislated for in the Finance Bill. 

How much can I put in?

It will have a tax-free threshold of €50,000, with a flat tax of 1% applied to anything above that threshold. 

It’s fair to say that it is at the more generous end of what was expected. Some experts had expected a tax-free threshold of around €20,000.

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The €50,000 threshold means that, for example, if the account reaches €60,000 in a single year, the tax payable will be €60. 

The maximum amount that people will be able to put into the account in a year will be €12,000, which works out at €1,000 per month. There will be no minimum contribution. 

What about other taxes?

There will be no requirement for people to engage with Revenue when it comes to the administration of the account. This responsibility will fall on the provider, which could be a bank, investment firm or insurer. 

The accounts will operate outside the scope of taxes that currently apply to different investment products, meaning capital gains tax, dividend withholding tax, investment undertaking tax or life assurance exit tax will not apply.

Deemed disposal also will not apply to the new account.

What can I invest in?

Anyone who chooses to open an account will be able to invest in shares, bonds and exchange-traded funds (ETFs) – a specific type of fund which allows buyers to track the performance of a group of shares.

A new national financial literacy strategy will be rolled out to help people develop their knowledge and confidence on investment.

Harris said changing Ireland’s investment culture will not and should not take place overnight.

“But I truly believe that this can be a moment we will look back on and say that that was the day we democratised the long-term gains from investment, and we ensured that more benefits were felt by far more of our people.”