Ireland Introduces New Investment Account

The Irish Government has introduced a new personal investment account with a tax-free threshold of €50,000, Minister for Finance Simon Harris announced in his Budget 2027 speech. The account will be available from July 1st next year.

The account will have a maximum contribution limit of €12,000 per annum, with no minimum contribution required. A 1% tax will apply to assets above the €50,000 threshold.

Industry sources have expressed mixed views on the new account, with some welcoming it as a strong first step to encourage Irish households to invest, while others have raised concerns about the lower-than-expected annual tax-free investment limit and the 1% tax on assets above €50,000.

Brokers Ireland chief executive Rachel McGovern said she had expected the cap to be about €20,000, close to the UK regime. Michael Healy, chief executive of IG Consumer at IG Group, described the 1% tax as a 'stealth wealth tax' that could limit uptake by households and put off some overseas investment service providers.

The new account will offer a range of investment options, including listed shares, listed bonds, and investment funds suitable for retail investors. However, highly complex and risky products, such as derivatives and crypto assets, will not be eligible.

Grant Thornton Ireland described the introduction of the new Personal Investment Account as one of the most significant reforms to personal investment policy in Ireland in decades. The company noted that Ireland continues to have one of the highest levels of household deposits in Europe.

The Government has also reduced the tax rate applying to specified investment funds and life assurance products from 38% to 35% from January 1st, 2027. The minister said the change will increase the proportion of a taxable investment return retained by affected investors.

James Costello, head of Davy's portfolio management group, said the lower-than-expected annual tax-free investment allowance will lead to a lower participation rate than if it were set at €20,000. He added that the account is meant to help people address financial resilience outside of retirement provision.