Here's a surprise for a lot of new investors. That popular world index ETF you bought? The gains on it probably aren't CGT at all.
Two systems
Funds based in Ireland or elsewhere in the EU, usually labelled UCITS, fall under a separate regime called exit tax. The rate is 41%. Shares in individual companies, like Apple or your employer, are CGT at 33%.
A quick check: if the fund's ISIN starts with IE or LU, it's very likely exit tax.
What's different
- Rate: 41% instead of 33%.
- No €1,270 exemption.
- Losses can't be used against your normal CGT gains.
- Every 8 years you're taxed as if you sold, even if you didn't (deemed disposal).
- It goes on your income tax return, not Form CG1.
Why it matters
If you lump ETF gains in with your share gains, you'll get the wrong answer in both directions: too little tax on the ETF, and you might use an ETF loss you aren't allowed to use.
cgteasy flags funds that look like UCITS ETFs and keeps them apart, so you can see each figure on its own.