I am very interested in the new investment account and how it would work.
Since the summer certain aspects but not all were released.
Following the budget on Tuesday, we now have a clearer idea
You can invest up to €12k a year into the fund
This is a use it or lose it amount
Their is no tax on the account if the balance is below €50k
If you go above €50k you pay 1% tax on the excess.
There is no CGT, deemed disposal or exit tax on the funds
For now, the accounts are only open to those over 18 with a PPS number
Accounts will be available from 1st July 2027
In a recent podcast, the Minister for Finance did state an option for children may be introduced at a later stage.
With this account, I can see two ways it will go.
You will have the hands-off investors who will have a fund via an investment or insurance company. Funds will be selected at the start and not change. Similar to how pensions operate for some people.
The other group is the more DIY investor who might use Trading 212 or Interactive Brokers and invest the money in a way that will suit them.
I also wonder if people will use it as an on-demand fund where they put the monthly amount in, then take a small bit out, for example, each December to pay for Christmas or will be more set-and-forget. What may answer this what style of product is offered.
For now, an investment in your pension may still be the better investment. You still have time to make a pension payment and claim relief ahead of filing your 2025 Income tax return.