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      In August 2026, the government published a roadmap for the future taxation of retail investment in Ireland which had the goal of examining the current system of taxation and proposing changes in order to encourage Irish savers to make use of options which could provide higher returns and facilitate more productive use of their savings beyond keeping them in deposit accounts.

      Among the changes proposed was the new Individual Investment Account (IIA), aimed at encouraging widespread retail investment in stocks, bonds, and funds with the potential to transform the Irish retail investment landscape for the better.

      Subject to the necessary ministerial order or orders being made, the new IIA is expected to launch on 1 July 2027.

      Gareth Bryan

      Partner, Tax

      KPMG in Ireland

      Key features

      The key features of the IIA are as follows:

      • Eligibility

        The account will be available to Irish tax-resident individuals aged 18 or over who hold a Personal Public Service number. Only one IIA will be permitted per person.  

      • Contribution limit

        Contributions will be capped at €12,000 each year, with no minimum investment and no overall lifetime contribution ceiling. Contributions generally may not be made during periods of non-residence.

      • Simplified tax treatment

        The existing income tax and investment tax regimes, including the deemed disposal rule for funds, will not apply to investments held within the account. Instead, qualifying providers will calculate, report and pay investment account tax to Revenue on the investor’s behalf.

      • Annual charge

        A tax-free threshold of €50,000 will apply. Investment account tax will be charged at 1% on the daily average value above that threshold. No charge will arise where the threshold is not exceeded.

      • Eligible investments

        The account may hold listed shares, listed bonds, financial instruments traded on a regulated market and a range of investment funds suitable for retail investors, including exchange traded funds. Derivatives, digital (crypto) assets and other complex products will not qualify.

      • Eligible providers

        Provides will include MiFID-authorised service providers, regulated fund managers and insurance companies.

      • Reporting and compliance

        Providers must file an annual notification containing details of each account by 31 March following the year of assessment. A return and payment of the total investment account tax due is due on or before 14 April. Penalties may be imposed on providers in relation to excess contributions, contributions during non-residence and ineligible investments.

      • Transferability

        Portability of IIAs between providers will be facilitated, where possible, on a tax-neutral basis.

      The Finance Bill also switches off a number of taxes and reporting obligations for IIAs. These include encashment tax, interest and dividend withholding taxes, Universal Social Charge obligations, investment undertaking exit tax and life assurance exit tax.

      Providers will not have to operate encashment tax on foreign dividends nor will they be required to make certain existing nominee, intermediary and offshore investment reports for assets held through the account.

      How will it work?

      The detailed customer experience will emerge as providers develop their products. Based on the measures proposed in the Finance Bill, the IIA is expected to operate broadly as follows:

      • Choose a provider and open the account

        Accounts will be offered by qualifying banks, brokers, fund managers, insurers and other authorised investment firms. Customers will complete the provider’s normal eligibility, identity and customer due diligence checks.

      • Decide how the investments will be managed

        The IIA is a tax wrapper, not an investment strategy. Depending on the provider, customers may be offered self-directed trading, investment advice, managed funds, model portfolios or discretionary portfolio management.

      • Put money in

        Customers will fund the account using the payment methods supported by the provider. Providers may offer recurring contributions and automatic investment, although the available functionality will differ between providers.

      • Transfer existing investments

        The Finance Bill provides for eligible securities to be transferred from another IIA without a sale, subject to both providers’ transfer processes and product availability. It is not yet clear if it will be possible to move eligible investments owned by the customer outside of their IIA into an IIA – if it is possible, it seems likely that legislation would be introduced to treat such a transfer as a disposal at market value and thereby crystallising a taxable gain or deductible loss outside the Investment Account. 

      • Make and manage investments

        Customers will select from the eligible markets and products made available by their provider. Dividends, interest and disposal proceeds may remain within the account for reinvestment or withdrawal. Purchases, sales and switches within the account should not require the investor to report each transaction separately to Revenue.

      • Take money out

        There is no statutory minimum holding period or statutory withdrawal tax. In practice, a customer may need to sell investments, allow trades to settle and then request payment to a verified bank account.

      • Fund the tax charge

        The provider will calculate the annual liability. Customers may need to maintain or add sufficient cash, or authorise the sale of investments, to meet the amount due.

      IIA taxation

      From Finance (No. 2) Bill 2026 and information in the Budget, we can now have an illustrative idea of what the new IIA might look like:

      Cathal opens an IIA in July 2027 and contributes €6,000, which he uses to buy shares in several companies. In November, he receives a dividend of €200. At 31 December 2027, the portfolio is worth €6,600.

      He will not pay income tax on the dividend within the account and, because the account remains below the €50,000 threshold, no investment account tax will arise.

      By the end of 2030, Cathal has contributed €42,000 and the account is worth €55,000. Using a simplified year-end illustration, the excess over the threshold is €5,000 and the 1% charge is €50.

      The statutory calculation is based on the daily average account value, so the provider’s actual calculation may differ from an amount derived using only the year-end balance.

      The simplicity of the regime comes with trade-offs. The annual charge is based on value rather than realised income or gains. Tax may therefore arise where the daily average value exceeds €50,000 even if the portfolio has fallen during the year, and losses will not generate relief within the account.

      Investors and advisers will need to assess the value of administrative simplicity against the effect of the annual valuation charge, provider fees, expected returns, asset mix and investment horizon.

      An additional tax charge will be imposed in a situation where an account holder contributes more than the permitted €12,000 per annum into the account. In such a scenario, the account holder will be liable to an additional 1% per month on the excess of the contributions.

      The Finance Bill also makes provision for the imposition of a €3,000 penalty payable by the account provider where, in the absence of a reasonable excuse, ineligible investments are held in an IIA.

      Other features of the regime

      Where an account holder ceases to be tax resident in Ireland, they must notify the provider of their change in residence and (subject to a 30-day grace period) they cannot make further contributions into their IIA during their period of non-residence.

      The legislation only permits contributions to be made in money so it appears existing investments cannot be transferred in.  However, the in specie transfer of investments out of an account does not appear to be prohibited. 

      While the Finance Bill does make provision to continue to apply the regime during the administration of a deceased individuals’ estate, it does not include any special provisions dealing with the application of capital acquisitions tax to gifts or inheritances of IIA assets. 

      It should be borne in mind that the purchase of Irish shares may be subject to Irish stamp duty (and foreign investments may be subject to foreign transfer taxes); however, special provision is made to disapply the 1% stamp duty levy on gross premiums for insurance-based investment products where they are held as eligible investments in an IIA (it is also worth noting that investments in Irish regulated funds are exempt from Irish stamp duty).

      Future innovations

      Consideration may be given in future years to allowing more than one IIA per person and to introducing accounts for children. Neither measure forms part of the initial regime. If introduced later, children’s accounts could offer another route for families saving towards education or a house deposit, but the eligibility, ownership and tax rules would need to be set out clearly.

      Changing the investment landscape

      The success of the IIA will depend partly on whether the €50,000 threshold and €12,000 annual contribution cap are considered attractive. It will also depend on provider pricing, the range of available investments and whether customers can open, fund, manage and transfer accounts without unnecessary friction.

      The principal opportunity is to replace a complex mix of taxes and investor reporting obligations with a single provider-operated regime. That could widen interest in retail investment and support a shift away from an exclusive reliance on deposits.

      However, customers will still need to consider investment risk, access, charges and the effect of the annual valuation-based tax. Clear Revenue guidance and consistent provider communications will, therefore, be central to confidence in the new account.

      Get in touch

      The measures unveiled in Finance (No.2) Bill 2026 will have far-reaching implications for businesses across Ireland. If you have any enquiries, comments, or wish to explore further, we are here to assist.

      Contact Gareth Bryan of our Tax team today. 

      Gareth Bryan

      Partner, Tax

      KPMG in Ireland

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