Irish Budget 2026 Predictions: What’s Next for Irish Investors?
Over 14,000 investment funds are administered from Ireland, with over €5.2 trillion in Assets Under Administration (AUA). Yet, despite being a global hub for asset management, Ireland makes it remarkably unattractive for domestic investors to access those same funds.
Funds, which include UCITS, ETFs, and life insurance-based investments, are taxed under the Exit Tax regime, which currently charges a flat 41% rate. Unlike direct equity investments, which are subject to 33% Capital Gains Tax (CGT) upon sale, Exit Tax applies not only at the point of sale but also every eight years, under a rule known as deemed disposal, even if no sale has occurred.
This structure has long created an uneven playing field and discouraged retail investment in diversified fund products.
A Call for Reform: Funds Sector Review 2030
In October 2024, the Funds Sector 2030 Review made strong recommendations to support long-term investing which included:
- Align Exit Tax with CGT at 33%
- Abolish the eight-year deemed disposal rule
- Introduce limited loss relief for fund investments
If implemented, these reforms would not only simplify Ireland’s fund tax landscape but also encourage broader participation by retail investors, who have traditionally stayed away due to complexity and punitive treatment.
What Our Neighbours Are Doing: A ‘Saver-Friendly’ Approach
Other countries have made long-term investing more accessible through tax-incentivised accounts. For example:
- The UK’s Individual Savings Account (ISA) regime turned 25 last year, and now supports over 22.3 million accounts holding £700+ billion in assets (AJ Bell, 2024).
- Sweden launched its Investeringssparkonto (ISK) in 2012, offering tax-efficient access to equity markets.
- Finland, in 2020 launched Osakesäästötili (OST), a capped equity savings account with tax deferral until withdrawal.
These accounts have helped build an equity culture from the ground up. Ireland, by contrast, lags significantly behind in providing modern, accessible investment vehicles for individuals.
Irish Stock Exchange: A Market in Decline
Ireland’s domestic equity market is also under pressure. The number of listed companies has declined to fewer than 25, down from nearly 100 in 1999.
Recent years have seen significant departures:
- CRH, Flutter, and Smurfit Kappa moved their primary listings to the U.S., attracted by larger capital pools and greater investor visibility.
These exits alone accounted for nearly 40% of exchange trading volumes.
Irish investors have come a long way from the days when diversification meant splitting your money between BOI, AIB, and Anglo. But the pendulum may have swung too far away from investing in our home market. Irish equities now account for just a fraction of total investor holdings, reflecting the lack of opportunities and a deepening disconnect between Irish investors and Irish-listed companies.
To reverse this trend, targeted incentives are urgently needed to encourage capital back into the local market. A logical first step would be to cut the 1% stamp duty on share transactions, a rate significantly higher than in many other European jurisdictions, and a clear barrier to domestic equity participation.
Without change, we won’t encourage new entrants and risk further departures, leaving fewer opportunities for both investors and the companies seeking to grow here.
Government Signals Ahead of Budget 2026
There are signs of momentum:
- Minister for Finance Paschal Donohoe has committed to reviewing ETF taxation and confirmed that fund taxation is on the table for Budget 2026.
- The government has also formally adopted the Funds Sector Review recommendations into future policy planning via the Programme for Government.
These signals suggest that meaningful change may be on the horizon, though timelines and scope remain unclear.
Our Budget 2026 Prediction
Optimistic scenario:
- Immediately align Exit Tax with CGT
- Eliminate the eight-year deemed disposal
- Launch a tax-incentivised long-term savings vehicle (Ireland’s answer to the ISA)
- Cut stamp duty on Irish shares to support the domestic market
More likely outcome:
- Removal of the eight-year deemed disposal rule
- A phased alignment of Exit Tax from 41% toward 33%
- No immediate launch of an Irish ISA equivalent, as auto-enrolment rollout challenges take priority
- Minor changes (or future commitments) on stock market reform, with no short-term turnaround expected
What Changes to Fund Tax Could Mean for You
| Lower Exit Tax (33%) | Better after-tax returns on ETFs and fund portfolios |
| No Deemed Disposal | Allows uninterrupted compounding and tax deferral |
| Loss Relief Introduced | Offsets underperformance, improves net outcomes |
| Simplified Rules | Reduces reporting burden on platforms and individuals |
| Greater Market Participation | Encourages long-term investing, reducing the amount of bank savings and helping people combat inflation |
Final Thoughts
Ireland’s current investment tax framework has, for too long, discouraged rather than supported participation in the stock market. With Budget 2026, the government has a clear opportunity to create a more investor-friendly environment that encourages long-term savings, supports capital growth, and simplifies investing in Ireland.
Stay tuned for our post-Budget breakdown, where we’ll compare these predictions to actual outcomes and outline what they mean for your portfolio, tax planning, and investment strategy.
Disclaimer
Metis Ireland Financial Planning Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland.
All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified financial adviser before entering any financial contract. Metis Ireland Financial Planning Ltd t/a Metis Ireland will not be held responsible for any actions taken as a result of reading these blog posts.