Ireland's New Investment Account: How It Compares to Capital Gains Tax on Shares

Budget 2027 confirmed a new way to invest in Ireland: the Investment Account. It opens on 1 July 2027. Instead of paying capital gains tax when you sell, or exit tax on funds, you pay a flat 1% a year on the value of the account above €50,000. Below €50,000 there's no tax at all.

That sounds simple, but is it better than holding shares the normal way? The answer depends on how much you have invested and how much your investments grow. Below we explain how the account works, then compare it with capital gains tax (CGT) on shares at different gains and account values.

Key Points

• The Investment Account opens on 1 July 2027.
• There's no tax on the first €50,000 of the account's value. Above that, you pay 1% a year on the excess.
• The tax is based on the account's value, not its profit, so you pay it even in a year your investments fall, if the account is worth more than €50,000.
• You can put in up to €12,000 a year.
• There's no CGT, exit tax or deemed disposal on investments inside the account, and your provider deals with Revenue for you.
• Outside the account, CGT on shares falls from 33% to 31% for sales on or after 7 October 2026.
• As a rule of thumb, the account works out cheaper if your investments grow by more than about 3% a year.

1. How the Investment Account Works

Here's what the Government has announced so far, in the Budget and its August Roadmap:

• Who can open one: anyone aged 18 or over who is resident in Ireland and has a PPS number. At launch, each person can have only one account.
• How much you can put in: up to €12,000 a year. There's no minimum.
• What you can hold: shares, bonds, investment funds (including exchange-traded funds, or ETFs) and insurance-based investment products. Derivatives and crypto assets are excluded.
• The tax: 1% a year on the value of the account above €50,000. Your provider values the account every day and uses the average of those daily values for the year.
• What doesn't apply: capital gains tax, dividend withholding tax, exit tax on funds and life assurance policies, and the 8-year deemed disposal rule.
• Paperwork: your provider calculates the tax, reports it and pays it to Revenue. You don't need to file anything for the account.
• Access: there's no lock-in and no minimum holding period. You can take money out whenever you want, and you should be able to move your account to another provider without a tax charge.
• Providers: banks, investment firms, fund managers and insurers will be able to offer the account.

The full rules will be set out in the Finance (No. 2) Bill 2026, which is due in the coming weeks. Some details may change before it becomes law.

What the Account Costs Each Year

Because the tax is based on value, it's easy to work out. An account worth €60,000 on average pays €100 for the year. One worth €100,000 pays €500.

With the €12,000 a year limit, it takes time to get past €50,000. Even if you put in the maximum, you're unlikely to pay any tax for the first three years.

2. How Shares Are Taxed Outside the Account

If you buy shares directly through a broker, two taxes apply:

• Capital gains tax when you sell. For sales on or after 7 October 2026, the rate is 31%, down from 33%. The first €1,270 of your gains each year is tax-free.
• Income tax on dividends. Dividends are taxed at your marginal rate of income tax every year you receive them, and USC and PRSI may also apply.

You pay CGT only when you sell. If you hold your shares for 20 years, you pay nothing on the growth until then. And if you sell at a loss, you can set that loss against other gains in the same year or carry it forward to future years. You pay the tax yourself, by 15 December for sales from January to November, or by 31 January for sales in December, and declare the gain on your tax return for that year.

The Revenue manual on CGT explains how the annual exemption and losses work. To estimate the CGT on a sale of shares, try our Share Sale CGT calculator. For other assets, use our Capital Gains Tax calculator. Both use the new 31% rate for sales on or after 7 October 2026.

3. The Simple Rule: About 3% Growth a Year

CGT is a tax on your profit. The Investment Account's tax is a charge on what you hold. So which costs less depends on how much your investments grow.

If you sold shares each year and paid CGT on your gain, the account would cost less in any year your investments grow by more than about 3%. Below that, CGT would cost less.

For example, say you have €100,000 invested and it grows by 10% in a year. If you sold and paid CGT on that €10,000 gain, the tax would be €2,706. In the Investment Account, the tax on the same €100,000 is €500.

But in a year when your investments fall, there's no CGT at all. The account still charges 1% on everything above €50,000.

4. Investing for the Long Term

Most people don't sell every year. Outside the account, you only pay CGT when you sell, so your money grows untaxed until then. Inside the account, you pay a little every year. So we also looked at someone who puts €12,000 into investments each year and sells everything at the end.

Here's how much better or worse off they'd be with the Investment Account:

• 2% growth a year: €1,000 better off after 10 years, €3,000 worse off after 20 years and €17,000 worse off after 30 years.
• 4% growth a year: €5,000 better off after 10 years, €12,000 better off after 20 years and €13,000 better off after 30 years.
• 7% growth a year: €13,000 better off after 10 years, €44,000 better off after 20 years and €86,000 better off after 30 years.

Compared with buying the same shares directly and paying CGT at 31% on the full gain when you sell. Ignores dividends and fees. Rounded to the nearest €1,000.

Example: Investing for 20 Years at 4%

Sinéad puts €12,000 into the Investment Account each year for 20 years, and her investments grow by 4% a year. She pays no tax for the first three years, and ends up with €343,508.

If she had bought the same shares directly, she would have €331,219 left after paying CGT when she sells. The Investment Account leaves her €12,289 better off.

What This Shows

The longer you invest and the more your investments grow, the further ahead the account comes out. With low, steady growth, the 1% a year can add up to more than the CGT you'd pay at the end, so direct shares can work out better.

Dividends would make the account look better still. Outside the account, dividends are taxed every year at your marginal rate, and USC and PRSI may also apply. Inside it, dividend withholding tax doesn't apply. The Department of Finance describes the 1% as a "final liability tax", which means there should be no further tax to pay on what the account earns.

5. When the Account May Not Save You Tax

The account won't always mean less tax. Watch out for these situations:

• Falling markets. The 1% is charged on value, not profit. If your €100,000 account falls to an average of €95,000 over the year, you still pay €450. Outside the account, you'd pay no CGT, and if you sold, the loss could reduce your tax on future gains.
• Low-growth investments. If you mainly hold bonds or other investments that grow slowly, the 1% a year may cost more than CGT would.
• Larger sums you want to invest now. You can only put in €12,000 a year, so you can't move a large lump sum in at once. It hasn't been confirmed whether shares you already own can be transferred in. If you have to sell them first, that sale is taxed under the normal CGT rules.
• Holding cash. The account is for investing, not saving. Under the Government's plans, you'll only be able to hold cash in it briefly, to buy investments or after selling them, and that cash won't earn interest.

6. If You Invest in ETFs or Funds

For many people, the bigger benefit is on ETFs and investment funds rather than individual shares. Outside the account, most ETFs and funds are taxed under the exit tax rules. Budget 2027 cuts that rate from 38% to 35%, but the start date hasn't been announced yet. You also face the 8-year deemed disposal rule, which taxes your gain every eight years even if you don't sell. And unlike shares, you can't use a loss on a fund to reduce your tax on other gains.

Inside the Investment Account, none of that applies. There's no exit tax, no deemed disposal and no tax return. From a tax point of view, the account is likely to work well for people who invest regularly in ETFs, especially over many years.

7. What We Don't Know Yet

The Finance (No. 2) Bill 2026 will fill in the detail. In particular, we're waiting to see:

• whether you can transfer shares or funds you already own into the account
• how the first part-year, from 1 July to 31 December 2027, will be taxed
• what happens to the account if you leave Ireland or die
• how and when the provider will take the tax from your account
• what providers will charge, which could cancel out some of the tax saving

We'll update this post once the Bill is published.

8. What to Do Now

The account doesn't open until July 2027, so there's time to plan:

1. Think about how it would be taxed for you. If you invest regularly for the long term, especially in ETFs, the tax treatment is likely to work in your favour. If you hold low-growth investments, compare the tax first.
2. Review shares you already hold. CGT falls to 31% for sales on or after 7 October 2026. If you're planning to sell, check how much of your €1,270 annual exemption you've used this year, and estimate the tax with our Share Sale CGT calculator.
3. Check provider charges when they're published. Any charges for the account could reduce the tax saving.

For more on the other changes announced today, see our post on Budget 2027: what it means for you.

How Irish Tax Hub can help: we can explain how the Investment Account would be taxed in your situation, and compare that with the tax you'd pay holding shares or funds directly. We can also work out the CGT on shares you already hold and advise you on the tax before you sell. We give tax advice only, not financial or investment advice, so we can't recommend which investments or provider to choose. If you'd like help, get in touch with us.