The Irish vs UK Investor. Who Has It Better?

In this guest article, David O’Carrol, founder of Submyt, explores how Ireland’s CGT, deemed-disposal rules, dividend taxation, and other investment taxes stack up against the UK’s more investor-friendly system. Submyt is a platform that automates capital gains tax calculations and reporting, helping investors manage complex trading, employee stock vesting, crypto, FX and more.

Why Does a Service Like Submyt.com Exist?

Put simply, even basic casual trading of shares on the stock markets can lead to a very complex level of calculations, payments to the Irish Government and filing forms advising of the same each year. When we factor more complex trading (volume), the recent trend of higher frequency vesting schedules on company issued stocks, Fx rates and crypto velocity, it becomes evident that the entire CGT system needs a revamp in Ireland. 

When we look to our closest neighbor, you would be forgiven for thinking that the Irish Government is at best nonchalant and at worst, actively hostile to equity investors in Ireland outside of pensions.

In this article we will take two hypothetical characters in each country to make a case for what Ireland could do to make provisioning for one's financial future more appealing and what that would look like.

Let's take a hypothetical example

Imagine two friends: Aoife in Cork and Ben in Liverpool. Both work in tech, both get shares from their employer and both want to grow their money over time. But the rules they play under are very different.

Ireland: Aoife’s experience

●      Tax on almost everything. If Aoife sells shares, she pays 33% Capital Gains Tax (CGT). She gets an annual exemption of €1,270 and can offset previous reported losses but the rest is taxed.

●      Funds & ETFs are tough. If Aoife invests in a simple index fund, she doesn’t just pay tax when she sells. Irish law forces her to pay tax every 8 years on “gains” even if she hasn’t sold. That’s called deemed disposal. The rate is 41%.

●      Dividends hurt. Any dividends she gets are taxed at her income tax rate (which can be over 50% once you add USC and PRSI). A 25% withholding tax is already taken before she even sees the money.

●      Savings don’t escape. Bank interest has DIRT tax at 33%, deducted automatically on the miniscule interest rates banks in Ireland pay.

●      Stamp duty. Buying Irish company shares costs 1% upfront.

●      Tracking / Reporting. Even if she just owns employee shares, calculating and accurately reporting on capital gains/ losses is time consuming and very complex.

 Net effect: Aoife feels like she’s being taxed at every turn unless she locks money into a pension. Pensions are great but you’re locking the money away for retirement. Maybe you want growth with some flexibility to take your gains early and enjoy life?

UK: Ben’s experience

●      The ISA superpower. Ben can put up to £20,000 a year into an ISA (Individual Savings Account). Inside an ISA, there’s no tax at all on growth, dividends, or interest. No deemed disposal, no extra forms.

●      Capital gains tax is lighter. Outside an ISA, Ben pays CGT at 10% or 20% depending on his income, with a £3,000 annual tax-free allowance.

●      Dividends are cheaper. He gets a £500 tax-free dividend allowance, and the tax rates are lower than Aoife’s marginal rate.

●      Savings get a buffer. Interest is partly shielded by the Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate).

●      Lower stamp duty. Buying UK shares costs 0.5%.

Net effect: Ben has simple ways to grow his money tax-free, especially with ISAs, and fewer surprise rules.

So, who has it better?

The UK investor. Hands down. The ISA is a game changer. It means ordinary workers can steadily build up wealth without worrying about complicated tax bills every year. Ireland doesn’t offer anything similar. Let's take a quick look at a comparison.

What should Ireland change?

For Irish workers to be on equal footing, policymakers could:

●      Introduce an ISA-style savings/investment account.

●      Scrap the deemed disposal rule on funds.

●      Revise the CGT Rate back in line with pre 2008 levels (20%).

●      Align the 41% fund tax rate with the normal 33% CGT (or proposed 20%). 

What if Ireland changed the rules?

Now imagine this: Ireland introduces an “Irish ISA”.

Here’s what Aoife’s life would look like:

●      She sells her entire portfolio triggering a CGT event, opens her ISA and rebuys those same shares or chooses to diversify into a portfolio.

●      She could put (say) €15,000 a year into her Irish ISA based on above.

●      Inside it, her employer shares, ETFs, or savings would grow tax-free.

●      No deemed disposal every 8 years.

●      Dividends? Tax-free inside the wrapper.

●      Savings interest? Tax-free inside the wrapper.

For Aoife, this would mean:

●      More take home growth. A €100 gain would be €100 rolled back into her ISA, not €67 after CGT.

●      Compounding actually compounds. Without tax bites every few years or on each trade, her investments snowball like Ben’s do.

●      Simpler planning. No more complex spreadsheets for CGT or remembering to file deemed disposals.

●      Confidence to invest. Ordinary people wouldn’t feel punished for putting their money to work.

What does it mean financially for Aoife?

Let’s say Aoife gets €5,000 in shares every year for 10 years. We’ll assume they grow at 7% a year, and she just holds them as she acquires them only selling at the 10 year mark.

Under today’s Irish rules (outside a pension and in very simplified arithmetic):

●      After 10 years, those shares are worth around €69,100 before tax.

●      CGT of 33% applies to her gains (~€19,100).

●      Final value: about €63,000

Under a UK-style Irish ISA (tax-free growth):

●      Same €5,000 per year invested.

●      After 10 years, the pot grows to the full €69,100.

●      No tax bill at all.

👉 Difference: almost €6,000 over 10 years.

Learnings from the UK

From the UK experience, the benefits are clear:

• Savers build serious wealth over time. Many workers max out their ISA every year and end up with six-figure pots completely shielded from tax.
• Encourages long term habits. Knowing you won’t face surprise tax bills makes people more likely to invest for decades, not just dabble.
• Reduces admin. UK investors don’t spend weekends filling in tax forms, the wrapper does the work.
• Levels the playing field. Ordinary workers get the same tax advantages as sophisticated investors.

For Aoife, this could mean turning her annual share awards and/ or personal investments into a proper long term nest egg, instead of dreading tax return forms every October.

How Ireland could adopt ISA-style reforms

If Ireland wanted to give ordinary investors a better deal, here’s what it could do:

• Introduce a tax-free savings & investment account (Irish ISA).
• Let people invest up to a set annual amount (say €15,000 – €25,000).
• All gains, dividends, and interest inside this account would be tax free.
• Simple reporting, no forms, no deemed disposal.

Tackle the deemed disposal rule.

• Abolish the rule, so people only pay tax when they actually sell.
• This would encourage long-term saving, not penalise it.

Align fund tax with CGT.

• Lower the fund/ETF tax rate from 41% to the normal 33%.
• This would remove the bizarre situation where buying a fund is taxed more than buying individual shares.

Raise small allowances.

• Increase the CGT exemption (currently €1,270) to something meaningful, like €5,000.
• Introduce small allowances for dividends and savings interest, so ordinary investors aren’t taxed on every euro..

Reverse CGT rate growth since 2008

• Revert to historic CGT rates (20%). Safe to say we’re out of the 2008 financial crisis and the government has been running surpluses for years.

What this would mean for you

For someone in Ireland receiving shares from their employer, dabbles in crypto or is a seasoned but not multi-millionaire investor:

• You’d have a fair, simple place to put them longer term without worrying about annual tax bills.
• You could reinvest dividends freely without losing half to tax.
• You’d finally be on equal footing with your colleagues in the UK (and many other countries that already have ISA-type accounts (France, Hungary, Sweden)). 

What would this mean for accountants or tax services like Submyt?

Well it wouldn't be good for Submyt long term. We would see a massive influx of work initially from folks selling current assets to move into an Irish ISA but it would be a onetime pot of gold! Sure there would be trickles thereafter but if the uptake in the UK is anything to go by, it would be rather quiet for us in the following years.

That is not however any justification for not making the CGT system work for hundreds of thousands of people. Accountants would go on and likely pivot their experience to one of the other vast areas of accountancy. Much of which is in desperate need of modernisation but that's an argument for another day. 

Submyt would be isolated because we focus solely on simplifying the CGT experience. We instantly calculate your liabilities and provide easy to read/use tax reports for as little as €60 per annum for as many tax years as you want. We guide on how to self-file which the vast majority of CGT payers can do. We also, for all plans, provide a portfolio view where you get an instant view of your unsold assets value when you log in at today's prices.

 So while we wait and see what budget 2026 brings us, if you need help with your CGT or even want to explore and try what we can offer with a free discover account, check out Submyt.com.