Savers looking for better returns have been dealt a blow after the Department of Finance concluded there is no justification for cutting the tax on life insurance funds to bring it into line with recent reductions in Dirt tax on bank deposits.
In a review published last week, the department said there is no evidence that a 41% exit tax is turning investors away from insurance funds in favour of deposits, where Dirt will drop to 35% in 2019 and to 33% in 2020. Dirt was charged at the same 41% rate as the exit tax on funds until 2017.
āIt is unclear . . . that investment in life assurance is diminishing as a result of the different rates of taxation applied to it,ā the review said.ā¦