From 1 January 2026, the rate of Exit Tax on certain investment products for Irish investors has reduced from 41% to 38%.
This tax applies to gains within many investment funds and life assurance savings policies, where tax is deducted when a chargeable event occurs, such as a withdrawal, maturity, or every eight years under the deemed disposal rule.
While 38% is still higher than the 33% Capital Gains Tax (CGT) rate that applies to direct shares and some other assets, the reduction is a welcome improvement and can make a meaningful difference to long-term net returns.
If you originally invested €100,000 into a fund that is subject to Exit Tax and it grew to €200,000, your total gain would be €100,000. Under the old Exit Tax rate of 41%, you would have paid €41,000 in tax, leaving you with €159,000 after tax. Under the new reduced rate of 38%, the tax bill would be €38,000, meaning you would receive €162,000. In this example, the tax change puts an extra €3,000 in your pocket, a difference that becomes even more meaningful on larger investments and over longer timeframes.
However, tax is only one part of the equation when building an investment strategy. The bigger picture still comes down to how you balance risk and reward in line with your goals.
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